Interview with Executive Chairman Will Stewart
Q: Can you share Xpansiv’s current capital plans?
WS: Q4 last year we set out to raise US$25M in a convertible note. Fortunately, we were significantly oversubscribed and closed on US $38M. Given market demand, we set expectations at the close of the note that we might enter the capital markets this year to accelerate business expansion.
Xpansiv is experiencing tremendous growth, with increased market share being driven by the rapid rise of ESG markets as companies seek to fulfill carbon-neutral commitments; to date, more than 1,500 global corporations have announced a commitment to net-zero. This growing dedication to decarbonization is expected to underpin market growth for decades to come, with Xpansiv’s digital infrastructure uniquely positioned to facilitate this transition.
A few examples of Xpansiv’s phenomenal growth: Q2 2021 trading volumes increased 374% on the prior corresponding period, marking the third consecutive quarterly volume record for Xpansiv’s exchange business; year-to-date carbon volume traded has exceeded 50 million metric tons, a more than 60% increase over the entirety of volume traded in 2020; the company just announced the one billionth ESG asset transferred in its portfolio-management system (since acquiring the technology in December 2019).
Xpansiv has an established track record of executing on our targeted growth initiatives, both organic and inorganic. The Xpansiv Board of Directors decided earlier this month to return to the capital markets. We are extending our convertible note plans and targeting to raise US$50M. In conjunction with the convertible note, we have also secured a further US$25M of conditional debt financing from a global investment bank to support future M&A transactions. We are confident this capital will provide Xpansiv with the funding it needs as the business rapidly transitions toward profitability and targets an IPO in 1H 2022.
Q: ESG is becoming an increasing focus in global markets with “sustainable investments” now representing 33% of all assets under management in the US. Can you elaborate further on Xpansiv’s unique ESG position?
WS: In mid-2019 Xpansiv merged with CBL Markets—in retrospect, a brilliant move. CBL was founded 12 years ago and Xpansiv is approaching its fifth year. The point is that Xpansiv is not a start-up, but a high-growth company with a first-mover advantage in a sector with significant macro tailwinds. ESG initiatives and commitments by businesses and governments are now catapulting Xpansiv’s product lines and marketplace. Xpansiv is the global marketplace for ESG-inclusive commodities. These Intelligent Commodities™ bring transparency and liquidity to markets, empowering participants to value energy, carbon, and water to meet the challenges of an information-rich, resource-constrained world.
Xpansiv aims to be the primary point of liquidity for bilateral and exchange traded transactions in the rapidly expanding ESG market. We have witnessed phenomenal growth in our carbon markets and believe the corresponding liquidity will enable us to extend our lead, enabling us to continue to innovate with product breakthroughs like the Global Emissions Offset™, attract new customers across the global marketplace, and bring new ESG-inclusive asset types onto our growing physical market platform.
Another unique corporate advantage is the Xpansiv Board of Directors, representing hundreds of years of experience running global exchanges, digital platforms, private equity funds, venture capital funds, and Silicon Valley start-ups.
Data is the new commodity, but trillions of dollars are in flux due to the frozen liquidity of information. At Xpansiv, we continue to unlock that data and provide markets with unprecedented ESG insights and opportunities. For the first time, it’s possible to map, buy, and sell unique ESG attributes that are permanently traceable—from source to market.
Q: Can you share Xpansiv’s go-forward capital strategy?
As I touched upon earlier, more than 1,500 corporations have announced net-zero initiatives to date. With increasing global ESG mandates, we fully expect this number will double—if not triple—over the next few years as all these companies lower their carbon footprint to attract new investors.
At Xpansiv, I am responsible for the company’s capital strategy and can say we are committed to growing Xpansiv to eventually become a global public entity. Whether we list on one or multiple exchanges, we want to position the company to support our clear lead as the planet’s marketplace for ESG-inclusive commodities. I should also note that as a venture capitalist in Silicon Valley these past three decades, I am an early seed investor in Xpansiv.
We have engaged co-advisors Shaw and Partners and Barrenjoey Capital Partners in Sydney and Perella Weinberg Partners (PWP) in NYC to run the convertible note process. If you are an accredited investor and interested in participating in the Xpansiv convertible note, please contact either Mike Ryan (email@example.com) or Dean Fremder (firstname.lastname@example.org) or Michael Grace (email@example.com).