The State of Investment into Security Token Infrastructure — Q3 2020
The year of the security token finishes its third quarter with a roaring response to the previous quarter’s slow pace with DeFi driving the resurgence.
It’s officially a new quarter and we’ve got the latest round-up of investments into Security Token Infrastructure from the previous quarter below.
The punchline: Roughly $14,000,000+ was invested in Q3, with an emphasis on general infrastructure in the space and DeFi services and products. Still, INX successfully raised more than $7,000,000 in the first-ever SEC registered IPO for its security token and cryptocurrency exchange, and will possibly close on maximum raise cap of $134,000,000.
This quarter’s bigger transactions were around other infrastructure companies include a $50,000,000 investment into BlockFi by Morgan Creek Digital, doubling the firm’s previous investment, and solidifying the firm’s confidence in the future of the company. Offering interest-bearing accounts, loans against cryptocurrency, and trading, BlockFi is building the infrastructure and user experience necessary for adoption by the average internet user. Furthermore, issuance platforms saw some traction raising over $6,000,000+ to further develop and commercialize tokenization technology with Digital Debt Markets leading the way in the UK.
Comply Advantage, recently named a World Economic Forum Technology Pioneer 2020, received a $50,000,000 investment from Ontario Teachers’ Pension Plan. Considering the conservative and professional nature of the fund, this marks a unique investment in the world of blockchain and security tokens. Comply Advantage is using machine learning to better prevent money laundering and terrorist financing on behalf of financial service providers. The firm is proving its position in a market for new technologies that address these issues by providing a dynamic global risk database that allows clients to better screen its users.
Regardless of the widely anticipated continuation of the economic downturn, infrastructure investment picked up and more than doubled in Q3. Recent clarifications by the United States Securities and Exchange Commission (SEC) regarding digital asset security trades further signal a seismic shift in sentiment with respect to the future of security tokens. As announcements from international regulatory bodies continue to release information on the new era of digital finance, we expect continued growth of investment and consolidation within the space.
As always, we will continue to update this list as we find new information. Our last update was on October 8th, 2020.
Read the Q2–2020 Market Report Here
Read the Q1–2020 Market Report Here
Read the 2019 Quarterly Reports Here
Issuance Platforms
Digital Debt Capital Markets, U.K. — ~$5,500,000
Dusk Network, Netherlands — $1,000,000 investment by iFinex (Bitfinex)
Black Manta Capital Partners, Germany — Undisclosed amount by COSIMO Ventures and SORS Digital Assets
Exchanges
INX, Gibraltar — $7.5M investment by A-Labs Advisory & Finance
Other Infrastructure Companies
BlockPass, Hong Kong — Undisclosed amount by BnkToTheFuture
BlockFi, San Francisco — $50M investment by Morgan Creek Digital, Winklevoss Capital, Valar Capital, Kenetic, and others.
ComplyAdvantage, London — $50M investment led by Ontario Teachers’ Pension Plan
Celcius, San Francisco — $10M investment in a Corporate Round led by Tether and an $18.8M investment in a Venture Round by undisclosed participants.
Republic*, San Francisco — $16M raised via a Tokenized Note (Republic Note)
We will continue to update this list with missing information about Q3. Stay tuned and subscribe to see the Q4 report in January!
*Also does issuance.
**Not applied towards the total investment into Security Token Infrastructure due to some of the capital being invested towards non-security token infrastructure.
