STOKR raises $4.6m from investors as demand for STOs soars
STOKR, a leading provider of proprietary technology to ventures that tokenise their distributable future profits, has raised $4.6m in funding from a raft of large investors.
The investment round follows on from STOKR’s announ cement last month of the launch of Mazzanti's security token offering (STO) on its investment platform.
The move made Mazzanti the first supercar brand in the world to raise funds in the form of digital securities - and allow its investors a revenue share via an STO.
In the first quarter of 2021, STOKR will also facilitate the tokenization of over €100 million (US$ 120 million) worth of assets.
Security Token Offerings
Security token Offerings (STOs) have seen a huge surge in popularity in recent months as regulations in various countries are becoming more STO-friendly. Despite the pandemic, STOKR received massive interest from ventures throughout 2020 as a turn-key solution to efficient fundraising in Europe.
The Luxembourg-based fintech, will use the investment proceeds to scale up and meet the growing demand it has been experiencing from ventures looking to raise funds via Security Token Offerings (STOs).
Security tokens are one of the newest investment service methods. Each token issued on STOKR represents a fixed percentage of the distributable future profits of the ventures.
The STOKR investment funds were raised from iFinex, G1 Ventures, and the Utopia Genesis Foundation. With over €3.9 million (over US$4.6 million) raised in total, STOKR plans to scale up its investment platform to meet the surging demand for EU-compliant security token offerings (STOs).
Speaking about the new investments, STOKR co-founder Tobias Seidl said, “We bootstrapped STOKR in 2017, when we founders pooled together over €1m of our own funds. It has been great to see the company grow as we have been able to welcome more ventures and investors to our platform, and the support from our own early investors will help scale up our operations even further.”
Security token investments
The strategic investments will add to STOKR’s suite of tools for ventures looking to raise funds.
Borderless Capital classifies itself as a cutting edge financial institution that invests capital and co-builds financial products to accelerate access, bootstrap adoption and create value through the Algorand Borderless Economy.
Meanwhile, G1 Ventures, a venture capital firm with a primary focus on blockchain innovation on the European market, brings its valuable network from the blockchain space for STOKR to better service its venture partners.
“The tokenization of securities enables a whole new wave of surrounding financial services such as fractional ownership of securities, integrated dividends payments with stablecoins such as Tether (USDt), lending, and capital markets, to name just a few,” said David Garcia, CEO and Managing Partner of Borderless Capital.
FIVE things fintechs must do to keep investors onboard
New investors flocked to the stock market during the COVID-19 pandemic. Thirty-eight percent of investors said they had never had a brokerage or similar account before opening one in 2020.
Low or no-fee trading options have helped accelerate the trend – nearly half of new investors said they accessed their account primarily through a mobile app. As FinTechs, how do we create the trust needed to keep new investors in the market and create a fruitful customer experience for them?
The financial industry does a disservice to individual investors if we merely offer tools that focus on making money quickly, an approach that usually backfires. Instead, the surge of interest presents an enormous opportunity for those who want to help more consumers use financial technology to educate them on responsible spending, saving, and investing in order to achieve financial wellness current fintech tools have welcomed individual investors in the door.
Now, it’s time to focus on education and improving their experience going forward. There are several ways those of us in fintech can step up to shape the future of retail investing so that it works better for everyone, starting with the following areas.
Equal access to financial wellness education
Financial health should be available to everyone — but today, not everyone has the educational resources to achieve it. One study shows that only 3.9% of students from low-income schools were required to take a personal finance class. What they aren’t learning in school or from family members, fintech companies can provide on their platforms.
The companies should move from solely offering financial services to a more responsible model of education, advice, and prescriptive choices to help consumers develop better habits and make wiser financial decisions. Not only can they empower consumers and bridge historical wealth divides, but they can also stimulate growth by opening up new consumer segments.
Just as we’ve come to expect that our fitness routines are tailored to our individual bodies, we’re also ready for finance tools that go beyond one-size-fits-all solutions. But only six percent of financial institutions say they’re using the kind of technology that allows them to deliver a deeply personalized experience. Fintech tools need to reflect that financial success looks different for each of us.
For one consumer, it may mean providing guidance on how to pay off student loans early; for another, it may mean prescriptive actions that enable them to stick to a budget for the first time; for a third, it could look like prioritizing environmental, social and governance (ESG) investments, so that her portfolio aligns with her political beliefs.
Now, we are seeing financial technology beginning to meet the demands of personalized finance in a substantial and meaningful way.
The rise of AI-Powered Advice
Big-picture advice and predictive guidance used to be a feature of high-end financial advisory firms — a perk only available to those who could afford it. But thanks to rapid advancements in data analytics and artificial intelligence (AI), that kind of holistic advice is now more accessible than ever. AI-driven robo-advisors can parse many different streams of financial information, delivering customized answers to key questions: Is it time to buy a home, or is it smarter to keep renting? Can I afford to take out another student loan?
Intelligent connectivity powered by AI can anticipate consumers’ needs and next steps, making proactive suggestions that guide them along the path to financial wellbeing. Fintech companies can also help consumers identify when their financial picture becomes too complex for a robo-advisor, and help them find a human financial advisor to meet their needs.
Focus on financial mental health
New investors are quickly finding that the market can be overwhelming. That’s not surprising, financial anxiety is common and studies show that financial stress can have an impact on mental health for some.
It’s not enough for fintech companies to give retail investors access; they also must provide the guidance and support that help consumers manage their financial well-being. Educational tools can ensure that consumers are well informed about their options.
Predictive analytics can anticipate consumers’ questions, serving them key information and insights before they ask. Features that emphasize a comprehensive notion of financial well-being, rather than short-term wins and losses, can also help ensure that consumers are keeping their eyes on the bigger picture.
Gamification for good
The surge of gamification apps has done an impressive job making investing as engaging as playing a video game or joining a social media platform.
Much of the current use of gamification emphasizes short-term thinking, but there’s also an opportunity to help consumers think more broadly about their overall financial picture. One example is peer benchmarking, a feature that enables help consumers to see how their financial habits compare to those of friends and fellow consumers.
Gamification can also be used to incentivize making smaller, smarter choices — for example, rewarding saving over making an impulse buy.
The future of fintech is about more than just broadening access to the markets. It’s about making sure more individuals have access to the tools that can help improve their financial well-being—in the ways that suit their own circumstances and needs. The potential to act within their own set of individual priorities, with their long-term financial wellness in mind is much more empowering to a consumer than simply relying on short-term, high-risk investments.