SeedInvest to Sell to Goldman-Backed Circle Merging Regulated Crowdfunding with Blockchain Powered Security Tokens
Press Release – Last week Circle entered into an agreement to buy one of the first securities crowdfunding platforms in the USA, SeedInvest. The acquisition is subject to FINRA approval.
This acquisition is unique in that:
It is the first sale of an equity crowdfunding platform in the United States
It is between 2 platforms that are leaders in their respective spaces – Circle in the crypto asset and blockchain infrastructure space. SeedInvest in the equity crowdfunding space.
It acknowledges the desire of the crypto world to have regulatory certainty and how acquiring an SEC licensed platform may further that.
It aims to enable security tokens that have fallen under regulatory scrutiny globally and
It opens the possibility to secondary trading of private securities without lockups and hence liquidity for investors.
According to Circle’s announcement, [our] “vision is one of an open, global and connected digital economy built on crypto assets and blockchain infrastructure. 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.”
The strategic acquisition will allow Circle to leverage SeedInvest’s “end-to-end capabilities needed for executing regulated crowdfunding, including startup due diligence, securities issuance, investor accreditation, payments and securities custody, as well as a broad range of innovative tools for startups to market their crowdfunding offerings online in a compliant fashion. With the merger and approval from key regulators, these capabilities will be expanded to support crypto-denominated investments including using fiat stablecoins such as USDC, as well as issuing and offering tokenized securities.”
SeedInvest has been a leader in the crowdfunding space since it was founded in 2012. Ryan Feit, co-founder and CEO played an active role in the passage of the JOBS Act which enabled the online selling of securities via platforms that are registered with the Securities and Exchange Commission and FINRA. According to SeedInvest’s announcement, [we] “provided millions of Americans access to startup investing for the very first time. We built a rapidly growing community of over 200,000 investors. We have funded hundreds of disruptive startups and helped to create thousands of new jobs. And we made the Inc. 500 List as the 4th fastest growing financial services company in America.”
Data that Crowdfund Capital Advisors collects on SeedInvest shows that they have raised over $36.7M via Regulation Crowdfunding for startups across the USA. Additionally, according to SeedInvest’s website, they have raised over $70M using other parts of the JOBS Act. A VentureBeat piece we wrote recently, stated that SeedInvest had the highest average raise of $435,780 per campaign, 89 percent more than the current industry average of $244,000.
Circle, is well capitalized and has solid investors (having raised $250 million from Goldman Sachs, IDG Capital, Accel, General Catalyst, Bitmain, Baidu, Jim Breyer and others). Its Co-Founders, Jeremy Allaire and Sean Neville took their two previous companies, Brightcove and Allaire Corp. Such capital and founder experience are promising for the future of the combined entities.
As states Circle, “This acquisition will enable companies to efficiently raise capital through a regulated platform, tap into diversified retail investor portfolios through Circle Invest and provide investors with secondary market liquidity on Circle’s digital asset exchange.” If successful, this might be the holy grail for crowdfunding and crypto assets.