Cryptocurrency has seen a downturn in value and there's a regulatory embargo on scam initial coin offerings, but none of this has swayed this Melbourne headquartered startup from raising $3 million that it plans on using to tokenize real estate for property developers and unlisted property fund managers like Charter Hall.
Konkrete Distributed Registries is a joint venture between Estate Baron, a property crowdfunding platform backed by ASX-listed property group Charter Hall, and start-up accelerator Collective Campus.
The start-up claims it can appeal to cryptocurrency investors, stung by a two-thirds drop in their portfolio since December, by offering tokens backed with tangible, less volatile assets. It also claims it will appease regulators by structuring its offer as a complying share sale.
Konkrete will use the $3 million, of which it has almost $2 million of pre-commitments to date led by Singapore-based blockchain investor Signum Capital, to build a platform that will allow property to be split up and sold as tokens, with a distributed ledger recording ownership and providing a secondary market for the tokens.
The tokens will be attached to shares in Konkrete, an unlisted public company, and their sale will therefore be regulated by the Australian Securities and Investments Commission.
The first development to be offered via Konkrete when it goes live in mid-2019 will be that of an existing client for Estate Baron's property crowdfunding service, Embrace Capital. Subject to holders of a majority of tokens approving the investment, Embrace's 77-lot Tree Creek Hill project in Goodna, south-west of Brisbane, will be fractionalized into security-specific tokens representing as little as $100 equity.
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