Dubai-Based Lombard Systems Raises $4 Million to Turn Tokenized Assets Into Usable Collateral

Lombard Systems has raised $4 million to bring its Delivery-versus-Lock standard for financing tokenized assets to banks, brokers and custodians. The Dubai and New York company announced the round on 5 November 2026, with Ethereal Ventures leading the investment.

The round combines pre-seed and seed funding. Alps Capital, First Commit Capital, Veris Ventures and Atka joined Ethereal Ventures in the round, alongside other backers the company did not name.

The problem Lombard Systems is solving

Tokenization has moved fast on settlement. Stocks, funds and bonds can now be issued and traded on blockchains, yet borrowing against them still works the old way, with collateral moved to a lender and enforcement handled through slow, bespoke paperwork.

The gap is widening as tokenized assets scale. The Depository Trust Company started operating its tokenization service in October 2026, and the United States Securities and Exchange Commission has granted conditional relief for venues trading tokenized stocks.

How Delivery-versus-Lock works

Delivery-versus-Lock, known as DvL, lets an institution use tokenized assets as collateral without moving them. The assets stay locked in the owner’s name at a custodian, broker-dealer or transfer agent, while the lender receives a legally enforceable security interest.

Each position is evidenced by a cryptographically signed Credit Receipt. The borrower keeps beneficial ownership throughout, and only the amount owed moves to the lender if a validated default occurs, under enforcement terms agreed in advance.

DvL covers Lombard and margin loans, financing against tokenized money market funds and stocks, securities lending by pledge and initial margin for uncleared derivatives under existing ISDA Master Agreements. Institutions can deploy it white label inside their own systems.

The design differs from lending in decentralized finance, where collateral moves into a smart contract with no named lender and no recorded security interest. DvL keeps the lending bilateral between a known borrower and lender, with the pledge recorded where the asset is held.

Tokenized stocks and funds are scaling now. Origination and enforcement of loans against tokenized collateral have to be as fast as the assets can move, while staying grounded in existing securities law. DvL keeps assets in their existing securities accounts and gives lenders enforceable rights, with enforcement agreed upfront. That is what turns tokenized assets into usable collateral.

Rico van der Veen, Co-Founder and CEO, Lombard Systems

Where the $4 million goes

The money will fund legal opinions in the United States, England and Wales and five further jurisdictions. That legal groundwork is what lets institutions in each market accept tokenized collateral with confidence that their security interest will hold.

Lombard Systems will also add more Control Locations, expand integrations with banks, broker-dealers and transfer agents, and grow its team. Its first institutional deployment goes live by the end of 2026, with further institutions following in early 2027.

The full DvL standard is due to be published in the first quarter of 2027. Institutions interested in adopting it can already register through the standard’s own website.

The round is small in absolute terms, yet Dealroom data puts it in the top 10 percent of seed rounds ever recorded in the United Arab Emirates, based on a sample of 1,286 deals. That ranking reflects how few early-stage cheques of this size are written in the region.

The founder and the backer

Rico van der Veen co-founded the company after buying Bitcoin in 2014 and watching decentralized finance take shape in 2020. He saw that a $50 million loan could be originated and enforced programmatically in minutes on-chain, while the same deal in traditional finance took weeks of legal work.

His first custody partner was Zodia Custody, and that early backing helped the company move from concept to live integrations. He describes the product as a messaging layer for secured credit, closer to SWIFT for payments than to another lending protocol.

Ethereal Ventures, which led the round, was founded in 2021 by Min Teo and Ethereum co-founder Joe Lubin. The firm manages just under $150 million across two funds and has backed more than 80 early-stage companies, including restaking pioneer EigenLayer.

Tokenization is creating real opportunities for financial institutions in trading and settlement, with significant potential to extend those benefits into financing. Lombard Systems is building a critical piece of that infrastructure with DvL, a standardized framework for financing tokenized assets.

Eeshaan Sachatheva, Co-CIO, Ethereal Ventures

Why the timing matters

Tokenized assets are still a small corner of global finance, yet they are growing fast. The International Monetary Fund puts publicly reported tokenized real-world assets at roughly $65 billion as of July 2026, against about $300 trillion in global capital markets.

Within that total, tokenized equities are worth only about $2.3 billion. That small base is exactly why Lombard Systems sees an opening, since the financing layer for these assets barely exists while issuance and trading race ahead.

The company has also published a short explainer video that walks through how DvL works in practice for institutions considering it.

For a related story, read how Razorpay secured the final licence it needed to run cross-border payments from GIFT City, another case of fintech infrastructure being built inside a regulated framework.

The test now is execution. A first deployment by the end of 2026 will show whether banks and custodians adopt a shared standard for tokenized collateral, or keep building one-off fixes of their own.