Obligate, a Swiss company formerly operating under the name of FQX, has just announced a successful $4,000,000 capital raise. The purpose set out for this fresh funding? Facilitate the tokenization and issuance of debt securities.
What is a Tokenized Debt Security?
A debt security is a financial product which allows for its issuer to raise capital from investors, in return for a structured repayment and positive return on investment. They are commonly issued as bonds, preferred stock, and certificate of deposits.
A tokenized debt security is essentially the same, but with ownership issued through the use of blockchain technology – benefiting from the transparency, efficiency, and flexibility inherent to the technology.
Tokenized securities are believed by many to be the next major area of adoption within the digital asset sector, as they combined the regulatory standards of traditional investing, with many of the sought after traits afforded through use of blockchain technologies.
Details of the Raise
In this particular capital raise, which Obligate indicates was a seed extension round, the company was able to attract $4M from a pair of new investors.
- Blockchange Ventures
- Circle Ventures
To date, Obligate has raised a total of $8.5M+ from investors all banking on a future in which tokenized securities are commonplace. Past investors include both Earlybird, and SIX Fintech Ventures.
Blockchain of Choice
In order to remain flexible, reliable, and efficient in its offerings, Obligate needed to find a blockchain network to support its needs. To that end, it decided on Polygon.
Formerly known as the ‘Matic Network', Polygon is a multi-chain, layer-2 scaling solution built atop the Ethereum network. Its structuring allows for it to boast both the security afforded by Ethereum, and impressive flexibility through its ability to function alongside various other networks.
To learn more about Polygon, make sure to check out our Investing Guide HERE.
Upon announcement of its successful raise, Benedikt Schuppli, CEO of Obligate, took the time to comment. He states,
“This backing from leading TradFi and Web3 institutions proves the value of applying blockchain technology to traditional financial instruments. This investment enables us to build a more accessible and efficient financial system where borrowers and investors are directly connected.”
In Other News
As previously stated, a debt security can come in various forms. The most common usage to date is however, is through the issuance of public bonds. We recently highlighted various examples of such issuances in our look at STA's ‘State of Security Tokens‘ report.