EIT Digital-supported startup PMEx gives unlisted SMEs their own private market

PMEx, a startup launched within the EIT Digital Innovation Factory, is set to revolutionise the finance and investment market by empowering SMEs to launch private share exchanges.

"Even if they make up the vast majority of companies, only 1% of small and medium enterprises are listed on the stock market, but all the remaining ones have the same need for financing," Frédéric Huignard, founder and CEO of PMEx, explains.

To allow outside investment in these companies, the startup has developed a sophisticated software-as-a-service platform.

The solution is based on a blockchain system to record orders to buy or sell shares. The company can invite a set number of investors and set a limit on the total number of shares sold or purchased.

"The share price is determined from an objective valuation performed by an independent analyst" Huignard explained. "The CEO then determines when its liquidity event will take place and decides who will attend."

In addition to offering small companies a simple way of managing the fluidity of their capital, the PMEx solution is much cheaper than getting listed on a stock market. It also provides each company with its own private market, which is less vulnerable to the fluctuations that can affect global exchanges.

To help investors make the most informed decisions, PMEx has developed SO SMART, a search engine that allows investors to identify the best opportunities.

"Many individual investors are willing to invest in unlisted SMEs. But they don't know where to find investment opportunities. SO SMART allows investors to find value-added information, benchmarking and ranking of listed and unlisted companies, registered on the PMEx platform or extracted from various public and private databases," Huignard says.

PMEx has been supported by the EIT Digital Innovation Factory, and fully took advantage of the opportunities created by the organization's 350+ members strong pan-European ecosystem of partners.

"Working with the Italian partners of EIT Digital, prompted us to look at the Italian market," and now PMEx has plans to expand to Italy, Huignard said.

The support from EIT Digital also helped in the fundraising. "EIT Digital opens doors when you meet investors," Huignard said. "When you say, ‘we have been backed by EIT Digital', well this is a good reference."

Based in Vitré, in the French region of Brittany, PMEx currently manages the implementation of private financial spaces for companies in the region and more generally in France, looking to set up employee shareholding or to offer liquidity to their existing family shareholders.

In September 2021, the startup closed its first fundraising round.

PMEx is proactively looking for several professionals with tech and business development profiles to join the team.

It is now preparing to launch the second version of its SaaS platform, which will allow private companies to solicit share purchases from external investors. This second version is based on a rigorous approach as regards compliance. It will be implemented pending approval from the ACPR (French Autorité de Contrôle Prudentiel et de Résolution) and the AMF (Autorité des Marchés Financiers, French market regulator)."

Market expansion will follow. "By the end of 2023 we want to cover all of the French market, and at the end of 2025, Italy and Belgium," Huignard says.

The young company is currently looking to raise a €500K seed round of investment in order to accelerate the product's deployment.