London-based Blockchain company Funderbeam announced that they will be building a Blockchain-based stock exchange specifically for startups that need investors. The company has Kaidi Ruusalepp, former CEO of Nasdaq’s Tallinn stock exchange leading it into the securities market.
Blockchain equity funding
The platform itself will be breaking away from traditional stock exchanges and will allow investors to have more liquidity when investing in growing companies while having control over how much to invest and how long to hold it for.
“Funderbeam is the future of exchanges, combining three things in one: data, funding, and trading, and it’s all happening across borders and on Blockchain technology," stated Ruusalepp.
Founded in Estonia, Funderbeam is creating a token system for investors to trade and purchase tokens which represents a loan given to the syndicate. Similar to holding equity, each token is worth a value and stake that is in the Funderbeam exchange. Funderbeam says that it will secure the issuing and trading of tokens as well as keeping track of investors with the help of the Blockchain.
Mads Emil Dalsgaard, CMO of Funderbeam tells CoinTelegraph:
“Funderbeam uses Bitcoin and Blockchain, utilizing a technology called colored coins. Colored coins are pieces of Bitcoin, where metadata is embedded on top of that and is recorded in the Blockchain. We call them tokens. Each token represent real world assets.”
Funderbeam raises $ 2.6mln
In addition, Funderbeam announced that they have raised $ 2.6mln in a funding round from multiple companies. This includes Draper Associates, Thomson Reuters and IQ Capital. On the other hand, Funderbeam is also doing a public funding round on their own platform to allow interested investors to pitch in.
The company has launched 3 funding campaigns in total and has raised over $ 4.6mln in capital from over 10 different VCs and private investors.
Why Blockchain stock exchanges?
Blockchain is already gaining traction in the financial sector with the world’s largest banks already developing their own technology for the benefits.
Traditional stock exchanges require brokers and cannot stay open 24/7. Funderbeam says that they are a 24/7 platform and with their own Blockchain, they will be ensuring that all transactions are kept and unmodified, have lightning fast buy/sell orders and have Bitcoin’s foolproof confirmation system.
“Blockchain carries many roles that in traditional stock markets are provided by many intermediaries. It is the trust that intermediaries should represent and the trust is now built on technology - the Blockchain,” adds Dalsgaard.
So far, only Bitsquare has a fully operational blockchain-based Bitcoin exchange which works similarly to a stock exchange such as orders, portfolios, etc. Bitcoin exchanges in the past have been hacked for being on one server but Bitsquare itself is decentralized which makes it almost impossible to actually take down. However, it is only a Bitcoin exchange.