German blockchain-based lending platform Bitbond is set to raise €3.5 million (around $3.9 million) via a security token offering (STO).
Per Tuesday’s announcement, the raised funds will be used to fund small business in Asia. Investors around the world can participate in the STO until June 8, except for citizens of the United States and Canada.
— Bitbond (@Bitbond) May 23, 2019
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Founded in 2013, Bitbond offers loans to small businesses and primarily focuses on SMEs using eCommerce platforms, like eBay, Amazon, and Etsy. As seen on its website, its loan volume surpassed $15 million with a user base of over 165,000 spread across 80 countries.
Earlier this year, Finance Magnates reported that the blockchain-based lending platform received a green light from BaFin to issue STOs. According to the peer-to-peer lender, it became the first such blockchain-based financial services to be supervised by the German market regulator.
“Small businesses are an incredibly important part of the economy, and hire the majority of all employed people worldwide. We see this STO as a way to help small businesses create more jobs, and supercharge their own growth,” Radoslav Albrecht, founder and CEO of Bitbond, said.
Bonds on blockchain
The security token, dubbed BB1, will work similarly to a bond and the company will buy back the tokens after 10 years. Per Bitbond, the targeted return is eight percent, which includes a combination of a percent p.a. interest coupon and a 60 percent profit participation potential.
The company is bullish with the fundraising technique as Albrecht previously predicted that Bitbond might raise as much as €100 million with STOs.
The German company is also decently funded as, according to CrunchBase, it raised $10.7 million from venture capitals. In the recent debt financing round, the company secured $5.5 million, while previously raising $1.2 million, $671,000 and $.2.2 million in three separate funding rounds.