Blockchain Startup Raises $3.9 Million Through Tokenized Share Issue

Blockchain startup London Stock Exchange Group Tokenized Share

A blockchain startup has raised $3.9 million through a tokenized share issue in London, after listing on a platform operated by the London Stock Exchange Group.

Blockchain firm 20|30 took part in the listing, which had been viewed as a trial of blockchain technology in the securities issue use case. The shares were issued in exchange for real cash payments, via the London Stock Exchange’s equity trading platform Turquoise.

20|30 helps other firms tokenize securities, so the decision to offer its own listing through this method is somewhat appropriate. In order to develop the technology, 20|30 was included in the fourth cohort of companies to benefit from the UK Financial Conduct Authority’s sandbox regulatory environment.

The share issue is the result of a partnership between 20|30, the London Stock Exchange Group and the Financial Conduct Authority, along with distributed ledger startup Nivaura. The partnership has been focusing on developing the technology for handling tokenized share issues, and providing compliant custody, clearing and settlement, on the blockchain.

The successful 20|30 share issue demonstrates the technology in practice, and could now pave the way for other companies to list assets on the blockchain through the London Stock Exchange platform.

According to the London Stock Exchange Group, the technology was part of an effort to develop “tools to help companies raise capital in a more efficient and streamlined way.”

According to 20|30 co-founder Tomer Sofinzon, the next step will be to explore how the technology can be used “to offer secondary transfers. Then we can work our way up the ‘capital stack’ to reinvent private equity and public markets.”

In July, Nivaura CEO and chief product architect Dr. Avtar Sehra praised the forward-thinking approach of the stock exchange.

“Someone can use our technology to do all the legal documentation, tokenize these assets and execute them. LSEG has then been forward-thinking enough to help get these orders out to the existing market.”

Trials of the technology will remain ongoing, but following the success of the 20|30 issue, the model will likely feature more prominently in listings in future, to provide a more efficient basis on which to list securities.