Announced on February 7th 2019, Issuance has acquired California-based financial marketing firm CrowdfundX, which has successfully marketed both digital securities and Reg A+ IPOs. Issuance CEO Darren Marble implied the acquisition will lead to the first ever Reg A+ Digital Securities Offering in the United States.
Details of Issuance Acquiring CrowdfundX Explained
CrowdfundX has marketed some of the most notable Digital Securities Offerings (DSOs). Digital securities— also referred to as security tokens— integrate compliant traditional financial securities with Distributed Ledger Technology (DLT).
In September 2018 CrowdfundX launched a security token advisory service. They use artificial intelligence-based marketing services to help financial firms acquire capital. CrowdfundX has facilitated successful marketing campaigns for names such as tZERO and KODAKOne.
With an official date of February 1, 2019, Issuance has officially acquired CrowdfundX.
Issuance is a private placement and capital formation platform designed strictly for digital securities. They will now incorporate the experience and expertise gained by CrowdfundX for the marketing of DSOs and Reg A+ IPOs.
Issuance CEO Darren Marble described the natural fit that CrowdfundX posed for Issuance:
“Our mission at Issuance is to usher in a new era of efficient capital raising, one which blends blockchain technology with traditional financial services and solutions. As a leading marketing services company operating in a highly regulated market, CrowdfundX was a natural acquisition for Issuance.”
CrowdfundX has been known to utilize direct-to-investor retail marketing through the Reg A+ securities exemption. The Reg A+ is considered a mini IPO, since it allows a U.S. or Canadian company to raise up to $50 million in a 12-month period using a ‘public solicitation’ of its shares, resulting in the exemption of federal (SEC) and state securities registrations.
In fact, CrowdfundX is the only firm in the U.S. to have successfully marketed Reg A+ IPOs to NASDAQ, NYSE, and OTC Markets Group. Their subsequent involvement in security tokens indicated a promising future for the young industry.
Why Issuance Acquired CrowdfundX: Reg A+ DSO Explained
Though terms of the acquisition were not disclosed, some details are available.
Issuance will inherit all revenue streams and clients from CrowdfundX, including Drake’s Virginia Black Whiskey and its current plans to perform a Reg A+ offering.
Though the security token industry has yet to see a successful Reg A+ offering, Issuance plans to change that, says Marble:
“We expect the first Reg A+ DSOs to be qualified by the SEC in short order. The acquisition of CrowdfundX positions Issuance to capture increasing market share from Reg A+ DSO issuers and deliver success for our clients while we develop our platform.”
Issuance has also been busy establishing strategic relations for such development.
In recent months, they’ve partnered with Prime Trust for custodial services, Vertalo for compliance and cap table management, and Tokeny to bridge the gap between traditional fundraising and DLT.
With tokenization having reached real estate, investment funds, REITs, equity, and fine art, the young industry continues to grow at a rapid pace.
What do you think of the recent acquisition by Issuance? How long will it take for Reg A+ digital security offerings to see approval? We want to know what you think in the comments section below.
Image courtesy of Issuance.