According to a blog on the Circle website, the Goldman Sachs-backed peer-to-peer payments technology company has signed a definitive agreement to acquire SeedInvest, a leader in the equity crowdfunding industry and registered Broker-Dealer. With this acquisition, Circle is clearly entering the security token space.
According to the Circle blog:
“This acquisition will accelerate our strategy of delivering a token marketplace that enables businesses and individuals to raise capital and interact with investors using open crypto rails and infrastructure.”
What is SeedInvest?
SeedInvest is a New York City-based startup that has built the largest equity crowdfunding platform in the United States, helping hundreds of startups raise capital and amassing a network of over 200,000 investors.
In fact, Inc. Magazine recently ranked SeedInvest as the fourth fastest-growing financial services company in the U.S. on its highly respected “Inc. 500 List.” Circle’s vision is to create an open, global, and connected digital economy formed on cryptoassets and blockchain.
Circle’s blog states:
“A critical element of realizing this vision is building new ways for businesses, and ultimately individuals, to use crypto assets to more efficiently raise capital, manage investors and provide liquidity.”
With this acquisition, Circle is making a big push into the increasingly popular security token space. When the proper security token infrastructure is in place, security tokens could very well provide increased liquidity for private securities, access to a global investor base, automated compliance, expedited and cheaper deals, and more.
Furthermore, the acquisition of SeedInvest will allow startups to resourcefully raise capital through a regulated platform, access diversified portfolios of retail investors through Circle Invest, and get secondary market liquidity through Circle’s digital asset exchange.
Thus, Circle’s acquisition of SeedInvest is a step in the right direction for the security token industry. We can only wait to see what the rest of 2018 holds for this emerging asset class.