The State of Investment into Security Token Infrastructure — Q4 2020
It’s officially a new quarter and a new year, so we’ve got the latest round-up of investments into Security Token Infrastructure from the previous quarter below.
The punchline: Roughly $87,000,000+ was directly invested in Q4, with an emphasis on general infrastructure and early-to-mid stage venture capital. More impressively, the industry has surpassed $1 Billion in investments into infrastructure, a sign that the industry is here to stay and has massive betting power behind it.
This quarter’s larger transactions include multiple exchanges including Archax in London and StartEngine in the US. We also saw numerous infrastructure companies raise capital including several funds such as DraperGorenHolm and Morgan Creek Capital.
Back from the dead! Neufund, a German fintech founded in 2016, is on a mission to connect capital seeking startups with retail investors, VCs, and angel funds. Despite facing issues with regulatory uncertainty that forced the firm to halt its tokenized equity offerings mid-2020, Neufund announced the closing of a €4,000,000 raise in a Series A round led by early-stage venture capital investment firm Atlantic Labs on December 14th, 2020. Proceeds from this raise will be used to help Neufund obtain the necessary financial licensing to expand on the company’s operations, to accelerate the development of products and services, and to make new hires. Having previously secured a few million in funding in 2018, this Series A round now gives Neufund a new wave of confidence going into 2021. Sitting on a fresh round of capital to pursue financial licensing, NeuFund is ready to participate in the security token industry again.
Recognizing that Q3 2020 showed no signs of a slowdown and even saw a doubling in security token infrastructure investment despite the economic downturn, Q4 was an even more progressive quarter for new capital entering the space. A substantial quarter for infrastructure investment may just be an early signal for a massive pick-up in investment to take place in early 2021. On top of gains in infrastructure investments in Q4, the quarter saw many successful STOs and other listings from top players in the space. New regulation concerning the financial sector’s interaction with digital securities and blockchain technology continues to advance early in the year and may even catalyze the growth that innovators have been predicting for years as the industry matures in 2021. Expect a similar-sized Q1 infrastructure investment report in 2021 folks!
As always, we will continue to update this list as we find new information. Our last update was on February 8th.
Read the Q3–2020 Market Report Here
Read the Q2–2020 Market Report Here
Read the Q1–2020 Market Report Here
Read the 2019 Quarterly Reports Here
Issuance Platforms
Neufund, Germany — €4,000,000 raised by 4 investors and led by Atlantic Labs and Udo Schloemer in a Series A investment round.
Exchanges
StartEngine, Los Angeles — $18,900,000 raised in an equity crowdfunding round
Archax*, London — $8,000,000 raised by a number of crypto VC firms in a seed investment round
Other Security Token Infrastructure Companies
Draper Goren Holm, Los Angeles — $25,000,000 raised for its traditional venture fund, Fund 1
SEBA Bank, Zug — $22,500,000 Series B financing round
Curv, Israel — $6,200,000 in a Series A round led by Franklin Templeton and Illuminate Financial
Upvest, Germany — €5,000,000 raised in a Series A round led by Earlybird Venture Capital
Dusk Network, Netherlands — acquired a 10% stake in Nederlandsche Participate Exchange (NPEX) for undisclosed amount
ICO, Crowdfunding or FinTech Companies Also Offering STO Services**
Morgan Creek Capital Management — $71,000,000 raised for the second Morgan Creek Blockchain Opportunities Fund
Acquisitions
Securitize, San Francisco — FINRA registered ATS Distributed Technology Markets (DTM) acquired for an unknown amount
INX — OpenFinance Network acquired
Currently fundraising category (notable mentions):
CoinLinked — $5,000,000
We will continue to update this list with missing information about Q4. Stay tuned and subscribe to see the Q1 report in April!
*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.
