As of November 20th 2018, Germany-based security token platform Neufund is set to launch Europe’s first primary issuance of tokenized equity offered to the general public. Fifth Force GmbH will initiate the offering in the coming week, with a minimum investment of €100,000— restricted from US investors.
Neufund’s Revolutionary Tokenized Equity Offering Explained
Neufund is a Berlin-based end-to-end security token platform. In the coming weeks, it will launch Europe’s first primary issuance of tokenized equity offered to the general public.
Parent company Fifth Force GmbH will use the Neufund platform to initiate its tokenized equity offering on November 27th. The offering will expire on December 15th, with the last seven days featuring a public sale.
Neufund CEO and co-founder Zoe Adamovicz described a promise that Neufund made more than a year ago: to conduct the first legally binding equity token offering (ETO) on blockchain technology in 2018:
“We remain true to that plan. The first ETO will be an ultimate showcase of our product.”
Details of Neufund’s First Primary Issuance Equity Token Offering
With more than 3000 investors from over 90 countries, Neufund feels ready to take this next step forward. They have seven companies in the queue for additional equity token offerings in the following months, and they claim to have been approached by ‘hundreds of companies’ who seek more efficient methods of fundraising:
“In the coming months, Neufund will host a number of offerings, however, it is up to companies to disclose specific dates for their ETOs.”
This particular offering will be available to select international investors. However, Neufund has taken a temporary precaution by excluding US-based investors for the time-being.
A last-minute audit requested by BaFin, Germany’s securities regulator, resulted in some unexpected changes for the offering. Following the audit, Neufund will have to require a minimum investment of €100,000. At a later time in early 2019, a second round of investing will take place with a much lower minimum requirement of just €500.
Adamovicz made the following comments concerning the sudden change of plans:
“… there is no reference for [the audit] in existing regulation nor it was ever mentioned in our conversations before. We couldn’t foresee it. Anyone can invest on our platform and we remain fully committed to making offerings on Neufund more accessible, with a lower minimum ticket size. We hope that, after this one is resolved, we will receive no more unexpected requests.”
The equity token offering— also referred to as a security token offering (STO)— has recently witnessed increased implementation. The LXDX crypto exchange based in Malta also recently announced an STO with tokenized equity and dividend rights.
The benefits of security tokens— to include added liquidity, greater investor access, and regulatory peace of mind— have led to more companies turning to STOs as an efficient means of raising capital.
With increased SEC activity, some have cancelled ICO plans and deliberately turned to the STO out of regulatory worry.
With the current cryptocurrency market atmospherics, security tokens could be just the remedy to bring institutional investors into the industry.
What do you think of Neufund hosting the first primary issuance tokenized equity public offering in Europe? Will other European platforms follow Neufund’s lead, or will regulatory constraints hold the industry back? Let us know what you think in the comments below.
Image courtesy of Neufund.