Dublin-based FXCH, the Spot-FX clearing house harnessing Blockchain technology, is set to launch an equity crowdfunding campaign on the Seedrs platform.
FXCH is seeking to disrupt the prime brokerage sector where parent company BAXTER-FX made its name. The FinTech startup featured in the news at the start of July when it cleared Spot-FX trades on the Blockchain - the first FX transaction completed without the involvement of a bank.
Franck Mikulecz, FXCH's managing director, explains:
“A small company, especially a startup, needs credibility to launch central clearing. We discovered the Blockchain would allow us to provide complete transparency about what’s happening to the counterparty’s assets. For us, it isn’t a trade Blockchain, it’s an asset Blockchain.”
There’s also the benefit of cost savings.
“The Blockchain offers a low-cost solution for exchanging assets,” adds Mikulecz. “When we settle an FX trade, we aren’t sending money from one bank to another. All the movements take place on the Blockchain which is much cheaper than using CLS or SWIFT.”
FXCH aims to raise €8.5 mln and the first €1 mln will be available through equity crowdfunding, giving retail investors an opportunity to invest in the early stages of a Blockchain startup. The €1 mln on offer represents 4.76 percent of the total equity, valuing the company at just over €20 mln. According to the campaign page, the money will be used to expand FXCH’s sales team and expand its infrastructure. The remaining €7.5 mln will come from Series A venture capital funding.
Mikulecz decided to crowdfund because it fits with what he calls FXCH’s “open source mentality.”
“We’ve used open source software for many years. We appreciate the contribution of the developers and we believe giving the crowd the chance to invest before institutional investors is in the same spirit.”
But there was a more practical reason too: “We also wanted to channel the buzz created by a crowdfunding campaign and use it for our goals.”
The campaign is at the private launch stage on Seedrs and will launch to the public shortly.