The first ever formally approved STO in Germany just closed. Bitbond missed their fundraising target, but the STO was still a milestone for blockchain-based fundraising in Germany and beyond.
Bitbond’s STO closed Monday, 8th of July. It was the first STO in Germany that was approved by the Bafin, the national financial markets watchdog. Launched in March of 2019, the STO has raised over €2.1 million from investors all over the world.
Bitbond published the following details on Twitter:
- The STO collected funds from investors from 87 different countries
- Affiliates earned more than €32,000 in commission payments for promoting the STO
- More than 1,000 news articles covered the STO
€2.1 million raised: STO missed its fundraising target
The Bitbond STO was a milestone for STOs in Germany and beyond. For the first time, the Bafin had approved a token prospectus for a public security token offering.
Being a first-mover comes with good and bad sides. One the one hand, the press coverage would have been significantly less if it had just been one of many STOs. Also, those who want to buy a security token don’t have that much choice at this point. On the other hand, security token sales are an entirely new concept that investors are not yet accustomed to.
The latter was probably the factor that weighed the most on the STO’s performance. Bitbond had a fundraising goal of €3.5 million. Having collected €2.1 million, they missed their target.
The hardcap of €100 million was unrealistic from the start, but STOs always set their goals high; otherwise they make themselves unattractive to institutional investors.
BB1 received its ISIN just one week before STO closure
Interestingly, the STO attracted investors from 87 different countries, although we don’t know the actual fundraising volume that came from international investors.
The BB1 token had received an international securities identification number (ISIN) just a week before the STO closed. ISIN uniquely identifies a security worldwide and is a prerequisite for many institutional investors for a security to be investable and tradeable.
Lesson learned for other STOs: Apply for an ISIN early on in the process.
Outlook: Token listing on two exchanges and Bitbond might in future provide issuance services
According to CryptoGlobe, Bitbond has concluded cooperation agreements with two renowned digital exchanges to list the BB1 token for secondary trading. One of them is the Gibraltar Stock Exchange, according to the Bitbond’s Twitter channel. However, as formal legal requirements still need to be sorted, the cooperation has not yet been announced.
Allegedly, other securities issuers have inquired with Bitbond to provide issuance services and token generation on-chain as a white-label solution. As Bitbond was the first ever formally approved STO in Germany, other businesses now want to benefit from the gained expertise. Bitbond is evaluating these opportunities and might be offering issuance services to other businesses in the future.
Thus, there might be more for Bitbond coming out of this STO than the €2.1 million raised. Whether or not the STO was a success is in the eye of the beholder. €2.1 million reached is already an accomplishment.Kudos to the Bitbond team for having had the guts to go for it.