Coinsilium, a listed pioneer in blockchain and cryptocurrency finance, has won a £330,000 follow-on investment from IOV Labs, as the two companies expand their joint venture globally. The Gibraltar blockchain fintech firm subscribed for 11,000,000 shares at 3p, a 20% premium to the current stock price. The deal means IOV Labs will more than double its stake in Coinsilium from 6.9% to 13.9%. With the crypto space enjoying a global resurgence, the timing of this investment could prove to be extremely lucrative.
Coinsilium announced on 4 December that it is now fully funded for all its activities until at least January 2022, with the IOV JV being a top priority for development.
This news follows hot on the heels of Coinsilium’s 19 October debut on the OTCQB venture market in the US, promising greater liquidity and opening up the company’s shares to a much larger US investor audience. Volumes have already been increasing and a share price rerate could now be around the corner.
In January 2020 IOV made its initial investment into Coinsilium, spending £250,001 for 9,434,000 shares at 2.65p per share.
IOV Labs is the parent company to RSK, the first smart contract platform secured by the Bitcoin network. Smart contracts are what underpin the DeFi market, allowing holders to stake their cryptocurrency in exchange for yield.
The follow-on investment marks a new phase for the two companies. The joint venture, called IOV Labs Asia JV, plans to expand the scope of its activities from regional Asia to worldwide. Its aim is to commercialise RSK solutions by selling to corporations, governments and NGOs.
This comes at a time of incredible innovation and regulatory achievement in the cryptocurrency finance space. Since May the total value of DeFi contracts has exploded from less than $1bn to over $14bn.
Under the terms of the deal IOV Labs have the right to install one director on Coinsilium’s board, notably demonstrating the ever-closer ties between the two companies.
Coinsilium CEO Eddy Travia commented:
“We welcome this timely follow-on investment from IOV Labs. Both IOV Labs and Coinsilium share big ambitions for the company and its potential to create the next generation of digital asset platforms as a blockchain, DeFi and crypto finance venture operator.
“Having a partner and significant shareholder with the size and scale of IOV Labs provides Coinsilium with a solid foundation from which to launch a range of ambitious blockchain and crypto finance ventures.”
Details of Coinsilium’s new strategy and operating model are available online here.
The timing of the £330,000 investment and expansion of the scope of IOV Labs Asia JV is “particularly favourable”, said Travia, given the “burgeoning growth and activity” in the cryptocurrency market, driven by fresh all-time-high prices.
Institutional Fear Of Missing Out
Rocketing interest in Bitcoin from the world’s largest asset managers has lit a fire under the cryptocurrency sector in late 2020, with well-placed companies set to profit.
On 29 November Guggenheim Partners, led by investing legend Scott Minerd, filed with the SEC reserving the right to invest 10% of its $5.3 billion Macro Opportunities Fund into Bitcoin.
Investment banks are following suit.
JP Morgan reported in November that ultra-high net worth investors are swapping gold for Bitcoin as a global inflation hedge, while Deutsche Bank confirmed rising interest from institutions in the world’s largest cryptocurrency. And as the Financial Times confirmed on 26 November, Bitcoin exceeded its 2017 all time high to break new price records. The price of a single Bitcoin has soared almost 100% since October 2020, from $11,536 to $19,799.
Last month Argentina and Pakistan were among the major nations to put forward new cryptocurrency legislation frameworks, while UK Chancellor Rishi Sunak announced his intent to legitimise and regulate cryptocurrency stablecoins, a key part of the DeFi process.
IOV Labs CEO Diego Gutierrez Zaldivar hailed the progress the JV has made across the year, noting “unprecedented interest” in DeFi applications which use Bitcoin, like the RSK platform.
“With the deepening of our strategic relationship, we are now optimally placed to capitalise on the opportunities in front of us to boost adoption in the RSK Blockchain and RSK Infrastructure Framework (RIF) ecosystem in the Asian region and now also, in other key markets globally”,
– Zaldivar said.