On December 5th, 2019, Greyp Bikes announced the close of a successful security token offering. The offering was open to retail investors and went on to raise €1.4 million using security token platform Neufund.
Details of Greyp’s Successful Security Token Offering Explained
Greyp Bikes is an e-mobility company developing the next generation of electric bicycles. Greyp — the Rimac Automobili spinoff — previously conducted a successful Series A round which raised €5 million.
The company launched its Security Token Offering (STO) in September. The offering was facilitated by investment platform Neufund, and aimed for a maximum raise of €4.8 million with a pre-money valuation of €45 million.
More than 1,000 investors from over 30 countries participated in the raise. Minimum investments were as little as €100 as retail investors were allowed to participate. Greyp says the funds raised will go on to further develop the company as “the future of mobility”.
The offering took place in Liechtenstein. Neufund says it constitutes the “first-ever fully compliant, blockchain based Initial Public Offering (IPO) accessible to retail investors”. Just a few months ago, in September of 2019, Neufund received regulatory approval from the Financial Monetary Authority (FMA) in Lichtenstein to offer security tokens to retail investors.
Zoe Adamovicz, Neufund CEO and co-founder, believes security tokens can bridge the gap to retail investors in a regulatory compliant manner. She says,
“We have proven that private companies can effectively utilize blockchain IPOs, whilst lowering the barrier to entry for retail investors. Neufund is the future of stock exchanges.”
Neufund’s Security Token Platform Explained
Neufund is now set to distribute a portion of the proceeds to its own shareholders. Back in late 2018, Neufund launched its very own security token offering in Germany. The offering featured equity in the form of NEU tokens and went on to raise €3 million.
Now, Neufund says NEU token holders will receive 3% of the capital raised, as well as 2% of the equity issued. The company says it distributed more than €100,000 in proceeds last year.
Security tokens are seeing increased levels of implementation, not just in Europe but across the globe. In Singapore for example, security token platform iSTOX has recently launched. In the United States, both real estate and equity have been compliantly tokenized. In the United Kingdom, two real estate tokenization projects involving tZERO and Smartlands are currently underway.
While the laws and regulations associated with each STO differ depending on the jurisdiction, certain regulatory bodies have provided guidance for STOs. In the United States for example, the Securities and Exchange Commission (SEC) has said security tokens are subject to the same regulations as traditional financial securities. Other jurisdictions, such as that in Hong Kong, have followed suit.
Other jurisdictions push for new laws in an effort to enable the implementation of security tokens, thereby boosting a local economy and facilitating a legitimate use-case for blockchain technology. At the same time, every established jurisdiction across the globe has a governing body tasked with investor protection. In the United States, the SEC was formed back in 1934, during the peak of the great depression. The organization’s mission was to protect investors and maintain fair markets in terms of capital formation. The commission claims to serve the same purpose today.
What do you think about Greyp leveraging Neufund to raise €1.4 million through a security token offering? Will Neufund lead the charge in replacing the IPO with the STO? We want to know what you think in the comments section below.
Image courtesy of Greyp.