TXSE Group Inc. said Wednesday it closed a third funding round of $155 million, lifting its war chest to $430 million. Existing shareholders supplied about three-fourths of the money, with the rest provided by new supporters the company did not identify.
From the start, TXSE has leaned on marquee names, drawing investments from BlackRock Inc. and Citadel Securities. It later followed with a second raise led by JPMorgan Chase & Co. Regulatory clearance from federal authorities came a year ago for the exchange.
TXSE has begun assembling an initial set of primary listings, largely from companies with strong ties to the platform. Energy Transfer LP features among the early names. Its chairman, Kelcy Warren, holds a significant stake in TXSE Group. Texas Capital Bancshares Inc. also joined, led by Rob Holmes, who sits on an advisory board to the exchange.
The NYSE and Nasdaq have countered with Texas-based venues aimed at broadening their reach in the state. TXSE's founder and CEO James Lee argued the focus will win business, saying, "Real competition for primary listings is here, and it is here to stay." He called the latest raise an "institutional validation" of demand for another listings venue and drew a line between strategies: "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."
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More venues courting companies to list their shares means more choice and, potentially, more activity in Texas. The takeaway for regular investors is simple: the battleground for where stocks debut is widening, and TXSE is betting a tight focus on running the core exchange will draw listings that might otherwise head to the incumbents.
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