On Friday, Circle, one of the most valuable U.S. cryptocurrency marketplaces, agreed to acquire SeedInvest, a crowdfunding platform for startups. Terms of the transaction were not disclosed.
However, if approved by regulators, the acquisition could help Circle do what SeedInvest does, but with crypto assets. In other words, the company is trying to create an all-in-one platform for crypto crowdfunding. The deal will also place Circle one step closer to enabling listed ‘securitized tokens’, an increasingly sought after privilege at a time when financial watchdogs are cracking down on the unregulated ICO space.
“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,” Circle CEO Jeremy Allaire said in an interview. “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.”
“A critical element of realizing this vision is building new ways for businesses, and ultimately individuals, to use crypto assets to more efficiently raise capital, manage investors and provide liquidity. Furthermore, Circle aims to continue to raise the bar for the crypto industry by embracing securities regulation as it applies to crypto and paving the way for security tokens,” Allaire and Neville wrote.
As part of the deal, SeedInvest will bring 30 employees to Circle’s New York office, according to a press release. The company, led by CEO Ryan Feit, has raised about $11 million itself, and has helped startups raise more than $120 million.
“It’s not just ‘how do we let companies do ICOs?”’ Allaire said. “It’s ‘how do we support the tokenization of everything?”’
SeedInvest, founded in 2012, helps private companies raise money from individuals on the internet. The New York-based firm facilitates the equity-crowdfunding service through its broker-dealer, SI Securities LLC. Notable funding rounds on SeedInvest have included Virtuix ($7 million), Knightscope ($5 million), Keen Home ($2.5 million), DSTLD ($2.5 million), ChargeItSpot ($1 million), Patch of Land ($1 million), Sharestates ($1 million), Snapcard ($1.5 million) and Vengo Labs ($2 million). In total, the platform has helped startups raise more than $120 million.
Circle is a peer-to-peer payments technology company headquartered in Boston, Massachusetts. Up until December 2016, Circle operated a bitcoin wallet service to buy and sell bitcoins. However, it ceased operations and launched a Bitcoin Blockchain-based remittance and messaging application to serve the unbanked. The company has received over US$135 million in venture capital from 4 rounds of investments from 2013 to 2016, including US$50 million led by Goldman Sachs. In June, Circle revealed plans to pursue registration as a brokerage and trading venue.
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Simon Chou is a B2B reporter and content manager specializing in technology and finance. He has worked with many clients in the fintech and blockchain space. He holds investment positions in bitcoin and other large-cap cryptocurrencies, and has been reporting on cryptocurrency since 2017. Currently, Simon is the content manager for a major cryptocurrency exchange @HybridBlockHQ.