By Staff Reporter
US-based securities token platform Securitize has raised $12.75mn in Series-A round funding in a sign that investors are gradually warming up to the idea of tokenization of assets.
The investors include Blockchain Capital, Coinbase Ventures, Global Brain, NXTP, Blockchain Capital and Xpring, a venture fund backed by Ripple, the company said in a statement.
The funding comes in the wake of the US Securities and Exchange Commission’s (SEC) new statement on digital tokens last week. The SEC reiterated its stance that if the tokens exhibit the characteristics of securities, they will be regulated under securities laws.
The demand for securities token is expected to grow as blockchain goes mainstream and so does the idea of tokenizing (digitizing) all forms of assets from stocks to bonds to real estate to art.
“The burden is on us in the industry to develop products and services that ensure regulatory compliance both here in the USA and in countries where investors are investing in, and trading digital securities,” said Carlos Domingo, the chief executive of Securitize.
He believes as the market in securities tokens takes off, “the opportunities for investors will be unlike anything seen before in the asset-backed securities markets.”
Blockchain Asset Review (BAR) interviewed Domingo in a Q&A interview on the future of securities tokens which was published last week (see here).
Securitize is planning to issue its own digital securities offering in 2019.
Other investors include Tokyo-based venture capital firm, Global Brain, which will assist Securitize with business development and marketing efforts in Asia, and NXTP, a leading Latin America fund, to help the company expand in that region.
Yasuhiko Yurimoto, chief executive of Global Brain, believes that Securitize platform will play a key role in the development of the security token market. Global Brain will leverage its network to help Securitize penetrate the Asian market, he said.
Securitize’s other strategic investors include Dona Redel, formerly the managing director at the World Economic, and former KKR partner and crypto specialist John Pfeffer. Brad Stephens, co-founder and managing partner of Blockchain Capital, will be joining Securitize’s board of directors.
Securitize helps its clients issue and manage digital securities on the blockchain, including dividends, distributions, and share buy-backs with the help of its Digital Securities Protocol (DS Protocol.)
In the traditional markets, Securitize could be seen as performing functions of an investment bank and stock exchanges.
Securitize partners with other players in the blockchain eco-system such as crypto exchanges, broker-dealers, custodians of crypto, escrow services, and other financial infrastructure for digital securities.
Securitize has already conducted digital security issuances for blockchain VC funds 22x, SPiCE VC, and tech startup Augmate.
Earlier this month, digital securities issued by Securitize were traded on AirSwap, a peer-to-peer crypto exchange, and Open Finance, a security token exchange. More partnerships are likely to be announced with other trading platforms such as SharesPost, Hyperion, Blocktrade and Tzero, the company said.