STO Platform ‘Deal Box’ Ventures into Web3 with $125M Investment Fund

On Wednesday, Deal Box announced the launch of Deal Box Ventures, a venture arm that will invest $125 million in startups that leverage foundational Web 3 technologies.

What is Deal Box?

Founded in 2016, the San Diego-based Deal Box is a capital markets advisory and security token offering (STO) packaging platform with a 15-year track record. The company, trusted by over 500 companies, notes that it has, “…become one of the first vertically integrated digital securities issuance and investment platforms”,  amidst the rapidly evolving financial markets.

The financial technology firm also offers a comprehensive offering process, including legal, compliance, and technical services that make the issuance process smoother. In addition, the company provides capitalization services through its network of service providers to help companies launch their digital securities offerings.

Looking Forward

Deal Box raised $1.5 million in a seed round in 2020, according to Crunchbase. Now, through its brand new investment arm, Deal Box Ventures, the company will focus on strategic investments in blockchain technology in order to create new products that will have a lasting impact on people's lives. The firm believes that blockchain technology has the potential to reshape the world as we know it, and through its new venture, Deal Box aims to unlock that potential.

“We created Deal Box to give companies and entrepreneurs better access to the capital markets, providing everything they need from due diligence to analytics, to valuation analysis, to get a deal funded – all in a box,” said Thomas Carter, Founder and Chairman of Deal Box.

Serial entrepreneur Carter, who is also the CEO of Total Network Services, has founded multiple funding platforms created for the purpose of principal investing in select vetted emerging growth companies, including Capital Window, CapValue, and equityround.com.

Carter described the company's venture arm launch as an important milestone in its “journey to invest in the most promising and disruptive blockchain startups.” He said they will provide these companies with all the right tools and funding ecosystem “they need to be successful by simplifying and reimagining traditional financing models.”

Deal Box says it is on a mission to redefine private placements through an unhindered commitment to transparency, regulatory compliance, and strong corporate governance.

Key Focus Areas of Investment

Deal Box's latest venture makes sense in light of the growing trend of tokenization, as revealed by a new report from consulting firm BCG that predicted digital asset tokenization to be more than a $16 trillion business opportunity by 2030.

Larry Fink, the CEO of the world's largest asset manager, BlackRock, which has 10 trillion in assets under management, also said recently, “the next generation for markets, the next generation for securities, will be tokenization of securities.”

Tokenization is the process of creating a digital asset on a blockchain, which authenticates the asset's ownership and transaction history. This approach enables a different way of trading assets, reducing fees and enabling faster settlements.

Working towards this future, Deal Box Ventures has already created the infrastructure to enable tokenization on the blockchain, eliminating much of the friction involved in raising capital.

Deal Box Ventures will primarily be focusing on five key areas – emerging growth, real estate, fintech, funtech, and social impact. In each of these core growth areas, the firm plans to invest in startups with the potential for rapid growth.

In the emerging growth marketplace, Deal Box Ventures will be leading rounds in early-stage companies that are developing unique, leading-edge products, the company stated. The focus in the $8.9 trillion real estate market, meanwhile, will be on sourcing and packaging high-alpha commercial and residential real estate to enable investors to participate in the growth and prosperity of cities and neighborhoods.

In its official announcement, Deal Box further shared that in the FinTech sector, its venture arm will be leading investments in software, mobile applications, and other technologies created to automate traditional forms of finance for both businesses and consumers. Deal Box ventures will also actively source and package research-driven investments supporting founders in building companies that can change the world.

The company has further included a fresh and unique category FunTech in its focus area, where it will lead investments in innovative leisure, action sports, and experiential consumer products that are changing how we rest and play.

Deal Box Makes Strategic Investments

Digital securities have been gaining traction over recent years due to being issued and traded using blockchain technology. This allows digital securities to offer many benefits over traditional securities, including increased security, transparency, and efficiency.

While still in its early stages of development, the digital securities market is expected to grow at a rapid pace in the coming years. The global digital securities market is expected to grow at a CAGR of over 35% during the period of 2020-2025. If you are wondering, the increasing adoption of blockchain technology and the growing demand for security tokens is driving this growth.

As such, Deal Box is fast-moving in its goal of providing structured security token issuance and marketing support for businesses launching digital securities offerings. As part of its Web 3 investment thesis, Deal Box has already completed initial strategic investments in many projects — all of which are focused on introducing a standard-first approach to solving the problem of device identity.

These projects include Rypplzz, which uses blockchain to connect digital and physical objects, creating futuristic location-based experiences that transform physical spaces. Forward Edge-AI is another one which leverages AI technologies to improve the human condition.

Yet another one of Deal Box's strategic investments include Total Network Services (TNS), whose product, the UCID (Universal Communication Identifier), is the world's first blockchain-enabled service for device management, supply chain security, software licensing, and equipment tracking.

Growing Efforts Towards Digital Securities

Deal Box's efforts toward advancing the digital securities space have been going on for many years. Just last year, it participated in digital asset ecosystem provider and transfer agent Vertalo's $5 million funding round, which counts SputnikATX, Tezos Foundation, Collab+Currency, CMT Digital, Wave Financial, and many others among its investors.

In 2018, Deal Box also entered into an agreement with compliant securities and asset tokenization platform Token IQ to power all asset tokenization offerings of Deal Box customers. Deal Box also made an equity investment in Token IQ as part of the deal.

Using Token IQ's patent-pending technology, Deal Box was able to deliver features like Know Your Customer (KYC)/Anti-Money Laundering (AML), which verifies the identity of the user and prevents tokens from being transferred or sold to ineligible users. It further allowed Deal Box to implement safe and secure token recovery for its customers and their investors, ensuring true compliance with securities regulations.

Meanwhile, Deal Box's involvement with Total Network Services, Corp., has been since 2020, when the latter announced the close of a Series A round of security tokens. Deal Box actually structured the security token issuance and provided TNS with marketing support throughout its offering process. TNS at the time engaged Vertalo to manage its KYC/AML integration, tokenization, and transfer agent service.

The proceeds from the sale of TNS tokens were used to complete the acquisition of key technology that it has had the exclusive worldwide rights to market under the Digital Names ™ brand and launch a worldwide marketing campaign to promote it, in addition to global OTT network, and related assets and intellectual property (“Acquired Assets”).

Now, with its recent $125 million investment fund, the STO platform ‘Deal Box' strongly indicates its commitment to the industry's growth.

All of these efforts towards digital securities combined with their strong track record and growing list of partnerships have Deal Box positioned itself to be a major player in the digital securities space for years to come.