These Aussie companies have raised more than $150m through ICOs
Link copied to
Australian companies have raised more than $150 million through initial coin offerings since the fundraising format emerged 18 months ago.
An Initial Coin Offering is a form of crowdfunding. It’s like an initial public offering — but instead of offering shares, an issuer sells digital tokens that can be traded on cryptocurrency platforms or swapped for services.
Some of the bigger Australian-founded company campaigns have won millions of dollars in pledges in mere hours.
So, who has actually raised what so far?
Here is an 18-month timeline of Australian businesses that have successfully raised capital through the issuing of tokens:
December 2016 – January 2017: Chronobank
Raised: $US5.4 million ($6.8 million)
Australia’s first completed coin offering came from HR blockchain disruptor Chronobank, with the startup raising $6.8 million through the sale of its TIME token. The company runs a platform that allows users to tap into the gig economy and be paid via cryptocurrencies.
October 2017: Horizon State
Raised: $1.4 million
Digital voting solution Horizon State completed a $1.4 million raise by issuing its HST tokens, which are used on the Horizon State platform for submitting votes or opinions. The company uses blockchain tech so organisations can canvas opinions and stakeholder votes with assured security.
October 2017: Power Ledger
Raised: $34 million
Power Ledger lets users trade renewable energy with neighbours and other stakeholders, earning more when power is in-demand
The company has claimed a place as darling of the ICO space, having raised $34 million from sale of its POWR token on the Ethereum blockchain and now locking in trials with a range for providers, including Japanese power companies.
November 2017: HCash
Raised: $53 million
Fintech HCash is a blockchain security business that raised 21,000 bitcoins worth of tokens in November 2017, then worth $53 million.
January 2018: CanYa
Raised: $12 million
CanYa is a blockchain services marketplace that kicked off 2018 by closing a $12 million raise through the sale of CAN tokens. The company connects users with services globally and allows them to settle deals in cryptocurrencies.
February 2018: Havven
Raised: $US30 million ($38 million)
Havven is a project to create a blockchain payments network and “stablecoin”, or stable cryptocurrency. It raised $26 million in a pre-sale of its HAV coins earlier this year and then rounded that out with an extra $4 million which were bought up in the first couple of hours of its coin offer. The company launched its platform in March and plans to go public with it later this year.
March 2018: Shping
Raised: $8.6 million
Shopping and rewards app Shping confirmed to investors in March it had raised “more than $8.6 million” through the issue of its SHPING token, which users can earn as they rate and interact with products on the shopping site.
June and beyond
This month has seen a range of new projects wind up and kick off. Blockchain startup Intimate, which provides a platform for instant payments across the adult industry using cryptocurrencies, closed its offer a few weeks ago after raising $4.5 million in a pre-sale earlier this year.
Meanwhile, other Australian entrepreneurs are gearing up for raises: the team at “crypto-Ebay” Ecryptostore are hoping to raise $12 million by issuing a ‘Free Market Token’ so users can shop online using crypto or fiat currencies.
Blockchain dining rewards app Liven had its eye on a $74 million raise earlier this year through the sale of LVN tokens, with the community whitepaper for its project being released last month.
How do the regulators feel about all of this?
ASIC has outlined where initial coin offerings stand legally.
The investments watchdog is responsible for determining whether a coin offer has been deceptive or misleading in its advertising and conduct and it has also given companies guidance on when an ICO falls under the Australian Competition and Consumer Act and when it must answer to the Corporations Act.
When initial coin offerings burst onto the scene, there was no framework for how these offers should be presented or how those that buy in should be protected.
At this point, ASIC’s commentary accepts that the format is appealing to Australian businesses and has provided some limits around how they can raise.
Its focus is in two main areas: whether an ICO offer and its advertising are misleading, and whether the offer really should be considered as a financial product and be subject to disclosure requirements under the Corporations Act.
The watchdog has told businesses to consider carefully whether their offer is a financial product or not.
If the offer takes the form of a “managed investment scheme”, then it falls under the remit of the Corporations Act and the company offering it has to meet “product disclosure, licensing and potential managed investment schemes registration obligations”.
ASIC says an ICO is likely to be a “managed investment scheme” if the offer involves buyers’ money being pooled together to produce financial benefits, like up the token price.
Meanwhile, if ASIC decides a coin offer presents itself to investors as though they are buying a share in the business through a crypto token, then that business must prepare a formal prospectus.
So far, the watchdog says it has put the brakes on a number of offers because they are either misleading or should be classified as managed investment schemes and therefore require more detailed disclosure information.