Will Circle’s Acquisition of SeedInvest Reinvent the ICO Game?

Anybody who regularly follows cryptocurrency news sites has read for months rather positive news about the niche and its future adoption. No day passes or more news is released that regulators will not attempt to kill the sector but will instead evolve towards regulation, allowing the cryptocurrencies to find legal foothold and wider adoption.

Thus also allowing the entry of more institutional players and so-called “old money”, which while many may not want is required nevertheless to go mainstream soon.

With always more, and powerful, exchanges following their local regulations as well as a strong player like Binance targeting first growth while making sure to stay on the lighter side of the greyzone, there is no doubt that after 10 years the crypto market is becoming a soon to be reality for everyone. Once more holistic regulations have been issued, across many countries, adoption will speed up and Jane and Joe [Average] may not immediately resort to the negative “only criminals use cryptocurrency” stigma, pushed also by people who may be slightly too vested in old money like crypto’s own Dr. Doom, Nouriel Roubini.

Luckily most commission investigation the sector invite both institutional and crypto players.

Yet, many may have overseen a rather significant news item last week: Circle plans to Acquire Crowdinvesting Platform SeedInvest.

Circle, which was created in 2013, has always aimed to become a major player in the online payment niche, and initially dabbed in cryptocurrencies with Bitcoin. Yet, after an initial start it pivoted away from the budding cryptoscene with as goal to become a major online payment gateway and to compete with Paypal and Venmo, calling itself a social payment company. The Canadian startup expanded to Europe as well, around 2016.

We never thought of ourselves as a Bitcoin startup. The media certainly classified us that way because we were involved with the technology. From the day we founded the company three years ago we’ve focused on trying to build a new consumer finance company. And one that makes money work the way the Internet works
— Circle co-founder and CEO Jeremy Allaire to Techcrunch

Shortly after its expansion to Europe, Circle returned to the crypto sector with Circle Trade offering OTC cryptocurrency trading services to large investors and individuals at a minimum trade size of $250,000. Circle Trade claims to trade more than $2bn in cryptocurrencies every month.

In the meantime Circle also received backing (funding) from major financial player Goldman Sachs, putting the startup’s valuation at a stratospheric $3bn.

And then, early 2018, Circle put itself on the main map of the crypto niche with its acquisition of the cryptoexchange Poloniex. The acquisition of Poloniex was rumored to cost $400 million.

Now, 8 months later, Circle is back with a !bang with the announcement of the planned acquisition of respected startup funding platform SeedInvest.

SeedInvest is a leading equity crowdfunding platform that provides investors with access to highly vetted startup investment opportunities. The SeedInvest network contains over 15,000 accredited investors, including hundreds of family offices and institutions. SeedInvest typically invests between $500,000 - $5 million as part of a syndicate.
— SeedInvest Crunchbase listing

What makes this deal, of which the terms weren’t disclosed, so interesting is Circle’s ambition to tokenize everything, as mentioned by CEO Allaire in an interview with Bloomberg as well as to use the just acquired platform to offer ICO services.

This was a company who had been at the forefront of collaborating with government to figure out how to make it possible to innovate in the way people raise capital ... Crypto securities are going to become a major new category of securities that ultimately every business is going to adopt, just like every business has a website.

What makes this so interesting, and important, for the cryptocurrency sector is that a major player, with institutional backing, is targeting to take the momentum of the cryptosector and build upon its strengths on a major respected platform. By merging the offering of security tokens ICOs with the high vetting standard known from SeedInvest, Circle stands to open a market with a still rather negative connotation - due many ICOs having ended up on the ICO graveyard - and stands a high chance attracting major investors for solid [ICO] projects.

Combining both the audience of SeedInvest, which mostly operates with a more traditional VC type investors who aggregate, and Circle Trading high volume investors the focus on listing only highly vetted players may bring a new era to the ICO wave.

While SeedInvest’s acquisition was reported by most major tech outlets, the news didn’t really reach more traditional mainstream outlets (MSM). Yet, it are evolutions like this which will bridge the crypto and the institutional money worlds.

Combined with another prolific, and respected, crowdinvesting platform Republic raising its own ICO and IndieGogo’s ICO platform raising $18m for the first security token ICO hosted on its platform, we will soon see a new wave of ICOs, not only more trustworthy ICOs but ICOs attracting also “old money”.

Closing as crypto news sites would: Moon soon?