A deal that was first announced in October of 2018, has officially been completed – Circle has acquired SeedInvest. While announced in October, approval from FINRA was required, resulting in the delayed confirmation given today.
This deal is of more significance than most. It marks the entrance of a major company in the digital securities sector. However, this entrance shouldn’t come as a surprise, as Circle has previously underscored their belief that digital securities and stablecoins are intriguing and emerging trends.
By acquiring SeedInvest, Circle now welcomes a proficient and reputable company under their wing. Here, SeedInvest will function alongside other Circle acquisitions, such as Poloniex. SeedInvest will continue to function as they always have, and with the same team retained. This means that they will continue to be the crowdfunding platform they always have, except, now with the support of Circle – a company valued at nearly $3 billion less than a year ago.
The difference will be that, through increased resources and reach, these companies will be delving in the world of digital securities in the near future. While SeedInvest has helped over 150 start-ups raise over $100 million to date, this process could become even more productive through the tokenization of equity.
With Poloniex offering the services of an established cryptocurrency exchange, it could, one day, prove to be the perfect platform to provide secondary market trading of digital securities. In doing so, Circle will have a well-rounded suite of companies that can offer end-to-end investor services.
Both Circle and SeedInvest released information today on their respective sites, regarding the acquisition.
Circle commented on their intentions, stating,
“Broadly, we aspire to bring the economic and technical breakthroughs of crypto assets and blockchain technology traditional forms of financial contracts such as equities and other securities. We believe that the tokenization of financial assets will ultimately unlock capital for rowing companies and investment opportunities for people everywhere. Over time, more functions of private equity will be tokenized – including voting and governance, dividend payouts, and other economic features. Tokenization will also create new opportunities for businesses to build better relationships with their customers by leveraging tokens linked to ecosystem behaviours.”
SeedInvest also touched on the significant of digital securities, and the role they will play in their future. It was stated,
“As part of Circle we will chase the remaining pieces of our original vision for SeedInvest. Since the passage of the JOBS Act, we have leveraged the Internet to streamline the startup fundraising and investing processes. We believe that tokenizing startups can take things to another level by providing liquidity, enabling capital to flow across geographic borders, and paving the path for completely new types of capital formation. And startups are just the beginning.”
They have shown their belief in blockchain, and the role it will play in the future of finance. Recognizing this led the company to make waves 1 year ago. This was done through the $440 million purchase of crypto-exchange, Poloniex.
SeedInvest is a New York based company that was founded in 2012 by Ryan Feit, and James Han. In the time since, they have grown to be one of the most successful crowdfunding campaign platforms, worldwide. Accomplishments of note in their time of operation include their participation in the passing of the 2012 JOBS Act.
In Other News
To learn more about Circle and their moves within the industry, make sure to read the article below.
Openfinance Seeks to Raise $50 Million
The popular security token exchange, Openfinance filed a Form D with the SEC this week. The company seeks to raise $50 million to further development of its secondary trading platform and security token ecosystem. The news demonstrates growing interests in the security token sector, specifically, exchanges that add liquidity to the market.
According to the SEC filing, Openfinance seeks to secure around $50 million to accomplish its new strategy. Interestingly, the company already raised $8.6 million successfully according to executives. Notably, this initial funding came from a variety of international investors. In total, 19 different investors participated in the first stage of the crowdfunding event so far.
The Openfinance exchange is no stranger to headlines. The platform became one of the first regulated security token exchanges in operation back in August 2018. Since that time, the platform continued to develop its tokenization capabilities. Recently, the company saw heavy coverage for its tokenization of the media firm, Current Media.
Openfinance is the dba of Decentralized Securities Depository, LLC. The firm provides a regulated secondary trading market for digital securities. As such, the platform has an alternative trading system (ATS) license. This license allows the platform to service both individual and institutional investors.
As part of Openfinance’s strategy, the firm partnered with some of the largest tokenization platforms in the market. According to executives, the company has strategic agreements in place with Securitize, Harbor, and Polymath.
In addition to its valuable partnerships, Openfinance opens and operates a licensed broker-dealer named Sageworks. The company also provides enterprise-level financial analysis and risk management software.
Liquidity is King
While the advantages of security tokens are immediately visible, there are still some concerns that the market lacks liquidity. Platforms such as Openfinance provide the additional liquidity needed to further the development of the sector. Both traditional and non-traditional markets benefit from this newfound liquidity.
For example, Openfinance provides investors with 24-hour trading. Comparingly, traditional securities investors must trade between the regular market hours of 9:30 am and 4:00 pm. While these investors can still match with buyers in the after-hours markets, the entire process is cluttered and leaves investors without many options. Tokenized securities are able to transfer and process at any time, including holidays.
Additionally, the platform’s tokenization capabilities allow for the creation of new market opportunities. For example, tokenization allows firms to add liquidity to traditionally nonliquidable assets such as debt-equity. Also, tokenization allows for more streamlined crowdfunding campaigns.
On top of the added features, the platform is available to both US and EU investors. Developers seek to expand the platform’s reach in the coming months. This strategy makes sense when you consider how the EU market continues to show strong security token development.
Openfinance – Moving Forward
It’s easy to see a scenario in which Openfinance becomes one of the most dominate exchanges globally. The firm provides smooth integration between brokers, custodians, transfer agents, and investors. As such, Openfinance plays a critical role in security token adoption.
WeOwn Goes Live with Project Crowd ETO
European investors got some surprising news this week as the AI-driven freelance platform, Project Crowd announced it had chosen WeOwn to host the firm’s upcoming equity token offering (ETO). The ETO will be among one of the first regulated offerings to occur in Europe. The news demonstrates growing blockchain integration in the EU financial markets.
WeOwn is a Liechtenstein-based blockchain crowdfunding platform. The company offers businesses some significant advantages over traditional alternatives. For one, businesses can launch new campaigns in 4 – 10 weeks. Also, there are no settlement delays, so businesses receive the highest level of liquidity available.
News of the strategic partnership first emerged on October 15. Importantly, this crowdfunding campaign will be the first ETO launched in the region. Additionally, it’s the first registered ETO WeOwn launched since the company’s inception. Together, these factors make the entire campaign an important milestone.
WeOwn CEO and Co-Founder, Sascha Ragtschaa spoke on the advantages STOs have over traditional crowdfunding strategies. He pointed out the small number (25) of successful IPOs launched on the London Stock Exchange this year. These failures included some high-profile companies such as rideshare firms Uber and Lyft.
Ragtschaa explained that these failures scared investors. This fear helped drive the growing private crowdfunding sector. WeOwn gives companies a cost-efficient alternative to the status quo. Compared to hosting an IPO, an STO provides firms with an easier to initiate and more transparent process.
Project Crowd is a freelance platform that leverages a variety of new technology to streamline the entire hiring process. For one, Project Crowd employs advanced AI algorithms to better match service providers with businesses.
Additionally, blockchain technology enables the platform to better monitor and record the abilities, tasks, and the experience level of each freelancer. This information is then looped back into the AI to continue to refine the systems hiring capabilities.
The freelancing market exploded over the last five years with platforms such as Upwork raking in huge profits from connecting employers with trained professionals. One recent study highlighted the astounding growth the community endured over the last few years. According to the report, the number of freelancers doubled since 2014 globally.
Project Crowd Chose WeOwn
Discussing the decision to go with WeOwn, Project Crowd CEO, Kathrin Hauk explained the motivation behind the move. Notably, both firms share a desire to integrate blockchain tech into the capital markets. Hauk called Project Crowd STO a “historic moment” for the entire industry.
Project Crowd ETO
The Project Crowd ETO is open to qualified EU investors currently. According to the firm’s documentation, 1 million shares equal a 7.25% equity stake in the company. Notably, each share costs 1 Swiss Franc and there is a 200 Swiss Franc minimum (USD 201). Additionally, investors will receive dividends periodically. Lastly, token holders have no voting rights.
The Future is Today
The Project Crowd platform has its sights on the multi-billion dollar freelance sector. If successful, the firm could become a major player in the market in the coming year. For now, developers seek to expand the platform’s capabilities and network in the coming months.
Smartlands Set for Expansion into U.S. with New Agreement
This move was undertaken, as Smartlands looks to expand their operations into other nations. By partnering with IIP Securities, Smartlands is now able to reap the benefits of their existing broker/dealer licensure. This means that Smartlands can now support U.S. based investors on their popular platform.
The company indicates that this is just a first step into their U.S. expansion, as they look to soon establish offices stateside.
Expansion into the United States is a big move. Already expressing a desire to expand globally, the U.S. represents a major milestone for Smartlands.
Beyond the agreement with a U.S. based broker/dealer discussed here today, Smartlands is looking to fuel their expansion by raising funds. We recently covered their decision to host an equity sale through conventional means in the following article.
Upon announcing this development, multiple representatives from Smartlands took the time to comment. The following is what each had to say on the matter.
Ilia Obraztsov, CEO of Smartlands, stated,
“Initially, the talks with IIP Securities revolved around our Joint Venture program…but eventually we have broadened the scope of the discussion and are now examining several options far beyond the broker-dealer licence agreement. Allowing US citizens to purchase securities issued on Smartlands compliantly has always been an essential part of our roadmap for global development, and we’re happy that this stage of our plan is now complete.”
Yaroslava Tkalich, CMO of Smartlands, stated,
“The agreement with IIP Securities would allow Smartlands to meet one of the company’s main challenges of broadening and diversifying the current investor base…We have already created a proprietary solution for fractional ownership of the real economy assets for most jurisdictions around the world. Today, working with a FINRA-licenced broker-dealer, we’re in a position to provide US investors with a huge array of brand new opportunities.”
As Smartlands continues moving towards their goals, the company has recently repositioned a couple of its most prominent employees.
This move saw previous CEO, Arnoldas Nauseda, transition to ‘Chairman of the Board’. The change was undertaken, as Arnoldas looks to contribute more towards company expansion and business development.
With this move, Smartlands CTO, Ilia Obraztsov, assumed the vacant role of CEO. In doing so, he is now the lead in Smartlands day-to-day operations.
Speaking with Arnoldas
While he still resided as CEO of Smartlands, we had the priviledge of interviewing Arnoldas. In this exclusive interview, we discuss not only Smartlands, but tokenisation at large.
Operating out of London, England, Smartlands is a tokenisation platform which was founded in 2017. The company operates under the watch of the Financial Conduct Authority.
CEO, Ilia Obraztsov, currently oversees company operations.
Operating out of New York, IIP Securities is a brokerage firm, which was founded in 2011. The company is registered as such with, both, the SEC and FINRA.
In Other News
With Smartlands targeting global expansion, it should come as no surprise that we have covered a variety of their moves over the past few months, as they work towards this goal. The following articles discuss, not only their plans moving forward, but an on-going project of theirs.