The parent company of the Texas Stock Exchange raised $155 million in a third funding round, bolstering its financial firepower as it challenges the New York Stock Exchange and the Nasdaq for equities listings.
TXSE Group Inc.’s existing shareholders are providing about three-quarters of the new money, with the rest coming from new backers. Funding for the exchange n
ow totals $430 million, the Dallas-based company said in a statement Wednesday. It didn’t identify the new investors.
“Real competition for primary listings is here, and it is here to stay,” James Lee, TXSE’s founder and chief executive officer, said in the statement. The latest fund
ing is an “institutional validation” of demand for a competing exchange, he said.
The TXSE, which won authorization from federal regulators a year ago, recently lured an initial slate of primary listings consisting largely of companies with close
ties to the exchange. One of the most prominent is Energy Transfer LP
, whose chairman, Kelcy Warren, owns a big stake in TXSE Group. Another is Texas Capital Bancshares Inc., which is led by Rob Holmes, a member of an advisory board to the exchange.
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TXSE built its early pitch in part around support from big-name backers, attracting inv
estments from the likes of BlackRock Inc. and Citadel Securities. It followed that up with a second round of fundraising led by JPMorgan Chase & Co.
The NYSE and Nasdaq, which have long dominated the competition for US listings, have respon
ded to the threat with Texas-based venues designed to expand their reach in the state. Lee said TXSE’s focus would help it win new business.
“While the legacy equities exchanges prioritize fintech, prediction and energy markets, mortgages, data businesses and other pursuits, TXSE is solely focused on being the best exchange operator in the world,” he said.
