At STOblock we provide curated market data, insights and research to make it accessible for anyone wanting to track the developments of the security token industry.
With the first quarter of the year now truly behind us, we can now share some of the market trends for Security Token Offerings that were announced in this period.
What do the numbers tell us?
In Q1 we identified 20 issuers that kick-started their fundraise campaign.
Let’s take a closer look and break these down by…
Month
The combined total amount announced each month has consecutively been greater than $150M USD, representing an average fundraise goal or hard cap per issuer of $23.5M USD.
Looking ahead, an important indicator will be analysing the outcomes of these offerings in determining if sale execution or investor demand is weak or strong.
Industry
Majority of the offerings announced are classified as FinTech, who have primarily consisted of issuance and exchange platforms. These platforms are standardising processes of traditional markets with an aim to lower the barrier of entry for issuers and investors in a compliant way.
Real Estate (REIT’s) that were announced in this period have been structured to offer access to distressed real estate assets. These offerings are asset-backed, providing profit distributions based on asset performance.
Country of Origin
The Country of Origin is where the proposed asset/s reside or where core operations take place.
The US had the most offerings announced in this period followed by the UK. The remaining countries had one offering announced, with significant deal sizes coming from Australia and Germany.
In comparing popular jurisdictions, the US makes up 45% vs EU 35%.
Security Type
Equity offerings have been highly favoured, with profit sharing and dividends being the most common type of ownership rights.
Debt offerings in this period have included a mixture of structured notes with high yielding returns.
Funds included two REIT offerings.
Blockchain
Ethereum is the most popular choice amongst issuers and at one point was the only preferred blockchain for public offerings.
We are now starting to see new blockchain entrants, such as Stellar and some issuers preferring to utilise their own Private or Permissioned blockchain as opposed to a public chain.
Summary
The industry is still at its early stages but we can start to see some preferred trends developing. Expect to see more infrastructure being built and solutions made available that will enable more participants to enter the market.
With that being said, there remains questions on market sentiment and if there is enough demand. Are institutions and investors jumping at the opportunity to tokenize or is too early? Which countries will pave the way for regulation? Battle of the blockchains, will it be private or public? Will debt offerings become more popular or REIT’s?
Through data, we aim to address these questions and unpack the developments of the industry in months ahead.
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Disclaimer: This publication is for informational and educational purposes only. It does not offer investment advice nor should it be construed as investment advice. The information contained in this publication is not, and should not be read as, an offer, recommendation or solicitation to buy or sell any securities. Data shown is sourced from STOs on our database which is either public information or by confirmed sources. Although reasonable care has been taken, we cannot guarantee the accuracy or completeness of any data we publish. Before making any financial decisions please undertake your own due diligence and seek professional advice.
