Building a Blockchain-based “Stock Exchange for Startups”
The London-based investment platform, founded in Estonia in 2013, is “where companies are funded and traded across borders, powered by blockchain technology,” according to its blog.
Founder Kaidi Russalepp stated the platform will be the “future of exchanges” and will challenge traditional capital markets. She described these markets as inefficient, full of intermediaries, and costly for companies.
They plan on challenging traditional capital markets by leveraging blockchain technology to combine data, trading, and investing on one platform. Essentially, Funderbeam covers all steps in the investment lifecycle, from initial screening (global database of startups and investors) to syndicate creation, management and exit.
A More Liquid Angel Funding Platform
Funderbeam equips people with the tools to research, fund and trade in private companies. However the larger plan is to become the “stock exchange” for startups, allowing early investors to easily withdraw from or enter into certain investments.
It is here where the investing platform really shines. Startup investing often has liquidity problems, making it difficult to get out of investments once committed. In unique fashion, the platform allows early stage investors to choose both how much to invest, and how long to keep the investment.
Additionally, Funderbeam investments are tokenized — giving investors more flexibility with their investments. Specifically, this kind of digital token flexibility will give investors the ability to bypass national borders and having to deal with foreign monies.
“Using blockchain technology we aim to show the stock markets how technology can turn the sector around. For the first time ever, early stage investors can choose both how much to invest, and how long to keep the investment,” Ruusalepp said.
She fleshed out the concept a little further by using a simple analogy: “Or to put it in a fruitier way, imagine if Bloomberg, Angellist and Nasdaq had a baby”.
Funderbeam Collects $2.6 Million in Recent Fundraiser
Continuing its vision, the platform raked in almost $3 million with its most recent fundraising effort. Leading it were 3 key actors: Draper Associates, Thomson Reuters, and IQ Capital.
Also contributing to this successful run were some other noteworthy names, such as Skype co-founder Jaan Tallinn and David Braben, the CEO and Founder of Frontier Developments.
One of the leading members of the round is Draper Associates, and founder Tim Draper explained the need for the stock market and other capital markets to upgrade their systems.
“Over the past 10 years stock markets have stopped working. They’re just not functioning anymore. … It’s crazy that the sector investing into innovation is using processes from the last century. It was the time to take the startup industry to the blockchain century! And reprogram public markets!”
To date, Funderbeam has launched three successful funding campaigns, and all investments are now tradable on the blockchain.
What do you think of Funderbeam and its fundraising efforts? Let us know in the comments below!
Images via Funderbeam, Kaidi Ruusalepp, CNN, Entrepreneur
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