After an initial digital currency sale that raised $12.5 million in just 12 minutes, blockchain startup Gnosis has decided to leave most of its remaining currency untouched for at least a year, co-founder Martin Koppelmann told Reuters on Tuesday.
Gnosis, a Gibraltar-registered company, sold 5 percent of its 10 million so-called GNO tokens to investors on Monday for $30 each, making it the most expensive digital currency ever offered in an initial sale, Koppelmann said.
Despite the steep price, the offering was oversubscribed, with the company turning away $3 million in additional bids, Koppelmann said.
"It wasn't ethically responsible to accept those additional bids because we had already reached our capital target," the Gnosis founder said.
With the offering, and Gnosis still holding onto 95 percent of its tokens, the company is now valued at more than $300 million, according to Koppelmann.
He said 4 percent of the total tokens would be distributed to its employees and founders over a four-year period. But the remaining 91 percent would be locked up safely for at least a year.
"At some point, we may need to raise more money through another token sale, but that won't be for another 1-1/2 to two years."
About two-thirds of investors came from outside the United States, Koppelmann said.
Selling digital tokens to raise capital quickly is a growing trend among blockchain startups. The average time frame to raise capital through the sale of tokens is about 30 days, while the really popular ones could get funding anywhere from under a minute to half an hour.
In contrast, going through a traditional venture capital firm would take a startup between six to 12 months to get funding.
GNO tokens were to begin trading on digital asset exchanges such as Kraken and Poloniex on May 1, Koppelmann said, although GNO futures were already being traded on BitMEX, a crypto-currency derivatives trading platform, at $56.25 each.
Gnosis was built on the public blockchain Ethereum, an open-source blockchain similar to the bitcoin network. Its platform enables individuals and companies to create prediction markets for any event.
Blockchain, a ledger of transactions maintained by a network of computers, first burst into the scene as the technology underpinning bitcoin. It has gained traction all over the world for its ability to record and track the movement of assets.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Tom Brown)