On January 30th, 2020, tZERO CEO Saum Noursalehi released a letter addressed to investors covering the platform’s performance in 2019 and outlook in 2020. Though tZERO missed the mark on a few goals, a number of important developments were made in 2019. These will only serve as a foundation for 2020, writes the CEO, which include plans for the company’s own retail broker-dealer: tZERO Markets.
tZERO CEO’s Letter to Investors in 2020
Throughout 2019, the security token industry saw notable progress. As for tZERO, Noursalehi described 2019 as the year of building.
The CEO outlined a number of highlights in 2019. The developing security token platform launched its own tZERO ATS, formerly PRO Securities ATS. tZERO also initiated live security token trading on its platform, launched its own Crypto App, received a number of patents, and worked with the Boston Security Token Exchange (BSTX) in filing a digital asset rulebook proposal with the SEC.
tZERO ambitiously aimed to list five security tokens by the end of 2019. As of now, there are two tokens listed. The ongoing delay is a result of regulatory and legal concerns, according to Noursalehi.
Still, the overall progress in 2019 “lays the ground for our continued success”, says Noursalehi. When looking forward to 2020 however, he says the company will shift its focus toward “growth and adoption”.
More specifically, the company is aiming to trade more security tokens and “enhance liquidity” on its existing ATS. A third security token is expected to go live in a matter of weeks.
Additionally, tZERO has signed agreements with a total of five new broker-dealers — and is currently working to get them integrated for trading on the ATS. Currently, the platform has one broker-dealer, Dinosaur Financial.
tZERO Markets and the Potential for Additional Funding Explained
Noursalehi said the company might seek additional funding in either late 2020 or early 2021. At one point, tZERO announced plans involving a $100 million investment from Makara Capital and GSR Capital. In April of 2019, the investment was officially called off. In today’s letter, Noursalehi wrote,
“As Overstock management mentioned recently, it is committed to funding tZERO. As our business continues to develop in the first half of the year and we continue to hit milestones and prove out the business model further, it may become appropriate to approach external sources of capital in late 2020 or 2021. We would only do this, however, in a manner that enhances our business and stakeholder value.”
The company also revealed plans to launch its own retail broker-dealer, dubbed tZERO Markets. The initiative is planned to integrate the company’s web-based platform with its mobile app, to create a single platform capable of trading both security tokens and cryptocurrencies. tZERO Markets is scheduled to launch sometime within the first half of 2020.
A long-term pipeline of potential issuers is said to reach numbers beyond 200. Potential assets to be tokenized include a variety of classes, with real estate expected to lead the pack:
“…our long-term pipeline of potential issuers now exceeds 200. These issuers are diverse in nature, spanning real estate, investment funds, technology, film and pharmaceutical companies. In the near term we expect real estate to be a leading asset class, followed by funds and other private companies.”
What do you think about tZERO CEO Saum Noursalehi’s most recent letter to investors? Will 2020 be the year of growth and adoption for tZERO? We’d like to know what you think in the comments section below.
Image courtesy of tZERO.