A German blockchain-based fundraising platform, Neufund has successfully raised $2.13 million in seed fund. Investors participating in the fundraising round includes Atlantic Labs, Klaas Kersting and a group of undisclosed angel investors.
Neufund is currently in the process of developing an investment platform where investors can fund startups against equity using cryptocurrencies. Once completed, the platform will be available for startups working in the cryptocurrency sector through Initial Coin Offerings (ICO).
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According to Neufund’s website, it is the first open venture capital fund. The platform is built on Ethereum blockchain, utilizing its smart contracts feature. The distributed organization issues crypto tokens representing the equity for startups raising funds through its channel. By using these features, Neufund speeds up the process of capital flow in and out of startups, while reducing the transaction costs.
“In venture capital, both startups and investors have an almost illiquid asset position – transaction costs in and out of a company are very high. Neufund offers a legal and a technical solution to bridge company shares and blockchain-based tokens. This is completely new because it allows tokens to not only represent ownership in a blockchain network but also equity in off-chain companies,” said the CEO and co-founder of Neufund Zoe Adamovicz
Currently, many blockchain platforms are raising investments through crowd sales organized on their own. The existing practice makes it hard for both the company as well as the investor. Investors have to manually search on the internet to find ICOs which may be of their interest. But with Neufund, they will be able to see all the ongoing fundraising campaigns in one place. It also makes it easier for them to compare different startups and put their cryptocurrency into a platform which they believe will offer them better returns.
The use of crypto-tokens also makes it easier for the investors to sell or trade them with other investors or cryptocurrency community members who might be interested in a particular project or startup. Currently applicable for blockchain relates projects, the platform may soon open it up for others as well. The recent investment is expected to accelerate the platform’s development and future marketing plans, helping them enter the market much faster.
Ref: TechCrunch | Finance Magnates | Image: Shutterstock