Only 1% of European SMEs have access to capital markets, while individual investors do not have access to investment in SMEs. It is based on this observation that Tobias Seidl and Arnab Nascar founded Fintech Stokr in 2018, launching a peer-to-peer investment platform that brings together investors and companies seeking financing. Stokr managed to raise 3 million euros and join Lhoft (Luxembourg House of Financial Technology), a Luxembourg platform dedicated to fintech.
Unlike traditional companies operating in the venture capital niche (French, venture capital), Stokr has an investment interface built on blockchain technology. Thus, the platform issues tokens, security token offers (STOs), through which investors can finance innovative SMEs in exchange for future profits of the company. “We help companies issue blockchain securities directly to investors,” explains Tobias Seidl, co-founder of Stokr.
Entrepreneurs seeking fundraising, who call on Stokr to attract investors, seek to create a community of users. “When you go to BMW, they always want to sell you cars, but they don’t tell you that you can also invest in the company,” says Tobias Seidl. To illustrate this aspect, he cites the case of Infinite Fleet, a Shanghai-based video game company that raised more than € 4 million on the Stokr platform.
Own financial instruments
Co-founder Stokr also emphasizes the “completely direct connection” between the issuer and the investor. Thus, it allows investors to have their own securities without resorting to any financial intermediary, as would be the case with securities invested and held through banks and other brokers. “When you own Apple stock, you have claims on your bank, which in turn has claims on the broker, and he, in turn, has claims on another broker.”
“We are not engaged in brokerage activities. We don’t see ourselves as a traditional financial player, “said Tobias Seidl. Moreover, he denies copying the current financial market to create a simple alternative with technology. As a market for alternative assets, Stokr is working to create new asset classes. In fact, Stokr’s customers are not only looking to finance startups and small and medium-sized businesses, but also to “tokenize” innovative alternative assets.
For this second part of its business, Stokr is developing its own financial instruments. His team, for example, created the first tool based on hashrate tokenization (French, hashrate, a measure of computing power per second used in cryptocurrency mining). “To do this, we have created the Luxembourg Securitization Mechanism, which uses the hash rate of bitcoins. That’s why we symbolized and named the hashrate contract for the mining company, “explains Tobias Seidl, who adds that” so far no one has done that. “
Luxembourg, “one of the main places for alternative investment”, is therefore an ideal venue for Stokr, according to its co-founder. Moreover, “in Luxembourg you can keep your own register of investors, which is not possible in other jurisdictions, as the law requires the use of an intermediary.”
Decentralized financial ecosystem
While Stoker is constantly looking for new products structured around blockchain and tokenization, Stoker wants to focus on the cryptocurrency universe. Thus, it is not a question of tokenizing shares or real estate, because “it does not bring much added value,” according to Tobias Seidl. “Our community of institutional investors and wealthy people invested in the blockchain and cryptocurrency business at an early stage. She believes that financial markets have changed. Thus, Stokr seeks to develop products related to decentralized financial markets.
Attracting players from a decentralized financial ecosystem, Stokr includes Blockstream Mining, a bitcoin mining company. “Blockstream Mining is one of the oldest bitcoin companies, whose CEO is the only one mentioned in Satoshi Nakamoto’s white paper (unknown founder of bitcoin, editor’s note),” said Tobias Seidl.
Another product innovation, according to Tobias Seidl, is the tokenization of transferred interest, a profit-sharing system used by private equity and venture capital firms.
Tobias Seidl believes that a large number of regular players, such as clearing houses or transfer agents, will “eventually disappear” as financial institutions increasingly choose blockchain-based platforms.
In the future, Stokr may well consider working with other types of partners, such as asset managers or banks. It’s about seeing “how to use their existing legal structures and licenses to continue our expansion,” says Tobias Seidl, noting that fintech’s strategy is not to be absorbed by a financial institution.
Stokr will remain independent and has no plans to label its platform, Tobias Seidl said in an interview.
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