One of the world’s most valuable cryptocurrency companies has acquired a crowdfunding platform as it seeks to fulfill its goal of overseeing the “tokenization of everything.”
Goldman-Backed Circle Acquires Crowdfunding Startup
Circle Internet Financial, a cryptocurrency unicorn with a $3 billion valuation, has inked a deal to acquire SeedInvest, an equity crowdfunding startup that helps privately-held small businesses raise capital from individual accredited and retail investors. The news was first reported by Bloomberg.
Speaking in an interview with the publication, Circle CEO Jeremy Allaire said that the Goldman Sachs-backed firm is eyeing this investment as a way to regularize crypto securities — often called security tokens — while also complying with Securities and Exchange Commission (SEC) regulations on securities offerings.
“This was a company who had been at the forefront of collaborating with government to figure out how to make it possible to innovate in the way people raise capital,” Allaire said of SeedInvest. “Crypto securities are going to become a major new category of securities that ultimately every business is going to adopt, just like every business has a website.”
“It’s not just ‘how do we let companies do ICOs?”’ he continued. “It’s ‘how do we support the tokenization of everything?”’
According to SeedInvest’s website, more than 150 startups have used the platform to raise $115 million from more than 200,000 investors. Though some offerings are restricted to accredited investors, retail investors can purchase shares in other companies with investments as small as $200, which the company says is 50 times lower than typical startup investments.
Terms of the deal were not disclosed, but Bloomberg’s report states that 30 SeedInvest employees will move into Circle’s New York office.
Tokenizing ‘Everything of Value’
When Circle acquired cryptocurrency exchange Poloniex in February, Allaire and fellow co-founder Sean Neville said that they envision the platform morphing into something far more robust than a standard-issue token exchange.
“We envision a robust multi-sided distributed marketplace that can host tokens which represent everything of value: physical goods, fundraising and equity, real estate, creative productions such as works of art, music and literature, service leases and time-based rentals, credit, futures, and more,” they wrote in a statement.
Since then, Allaire has said that Circle is pursuing SEC registration as a licensed broker and trading venue and hopes to one day receive a federal banking license.
Circle is not alone in its quest to bring security tokens to the mass market. Crowdfunding platform Indiegogo has partnered with a broker-dealer to create a security token platform. The first asset listed on the platform is a cryptocurrency token that represents equity in a luxury resort in Aspen. Overstock subsidiary tZero is also building a security token exchange.
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