During the ICO of Cross Coin, a Singapore-based company, $5 million in cryptocurrency was raised for investment in the tech start-ups within Starta Accelerator, a Russian and American initiative. A remarkable $1.5 million was raised during the first 15 minutes of the crowdfunding campaign, and the full amount was raised in less than a day. Tokens were created on the Waves blockchain platform. The breakdown of raised funds is as follows: Bitcoin – 909; Litecoin – 4,168; Waves – 203,422; Ethereum – 5,200; Ethereum Classic – 5,793.
Cross Coin issued 5 million cryptographic tokens during the Initial Coin Offering, at a cost of $1 each – making the venture industry open to a wide range of applicants. $1.5 million of the funds raised will be used to refinance the pool of 21 start-ups that participated in Starta Accelerator’s program in 2016-17, with the remaining funds used for start-ups in the next tranche of start-ups.
As a result, a total of 60-70 startups from Russia and Eastern Europe will be funded. All start-ups in the investment pool are selected and have passed through the Starta Accelerator acceleration program in New York. The accelerator team helps them adapt their business to the promising US market and prepares them for exits.
“ICO projects aimed at developing existing business, or financing startups that have already tested their business models and started generating revenue, is a new promising trend in the cryptocurrency space. The successful crowdsale of Starta Accelerator and Cross Coin shows that investors welcome such new opportunities, and companies have additional ways of raising funds for development using blockchain technology,” says Sasha Ivanov, founder and CEO of the Waves blockchain platform.
“Investors can place their bets on start-ups that have already passed the initial stages of their development and raised their first investments from various funds, accelerators and business angels. Startups going through Starta Accelerator’s programs are integrated into the business environment of the USA – the largest and most promising market. This is a unique characteristic of our project. Supporters of the venture gain access to a diversified portfolio of actively developing startups. I’m confident that our project with Cross Coin is a great format for the venture market, which will be developed further in the future,” comments Aleksey Girin, Head of Starta Accelerator and General Partner of Starta Capital.
“Democratisation of venture investment is the key idea of the project. Exits of the startups included in the investment pool will allow the ICO’s participants to realise an income comparable to the level of profitability in the venture industry,” comments Head of Cross Coin, Kayrat Kaliyev. “The second focus for the project is the creation of a highly liquid secondary token market. This will allow many potential investors to participate in venture financing of projects with a low entry threshold and the ability to exit at any stage of their implementation.”
“The market for cryptocurrency investments actively develops and provides powerful capabilities for companies and investors. There are new formats for participation in crowdfunding using blockchain technology. The venture of Starta and Cross Coin’s ICO is an example of an effective solution. The completion of the ICO in such a short period of time was a result of the well-coordinated work of the project’s team and the marketing support team, which managed to communicate the benefits and features of this new financial tool to a wide audience,” said Vitaliy Tsigulev, CEO of Digital Finance Agency, which implemented a comprehensive marketing and communication support for the crowdfunding campaign.
The ICO’s participants will have the opportunity to benefit from exits of the startups to generate revenues comparable to those in the venture industry, or to trade the tokens on the secondary market – playing out all the stages of growth of each of the startups in the investment pool. According to venture terminology, news about the purchase of the start-ups by strategic investors – an exit – will be the most significant impact on the price of tokens on the secondary market. In this case, the issuer of the Cross Coin’s tokens will receive a part of Starta Accelerator’s profits from the exit of each of the exiting startups, in proportion to its share in the portfolio. The entire amount of Cross Coin’s income from the exits, net of administrative costs, will be used to buy back tokens at market price.
About Starta Capital
Starta Accelerator is an acceleration program in New York that was launched by the Starta Capital Foundation in 2015. The mission of the program is cultural and business adaptation in the USA and integration into the investment ecosystem of technological startups from Russia and Eastern European countries.
Aleksey Girin is a business angel and a private investor. He is a co-founder and Managing Director of the venture fund of Starta Capital and Starta Accelerator. He had been working in the field of audit and finance for more than 15 years and in the venture capital industry for more than 10 years. He is Master of Economics.
Kayrat Kaliyev has been working in the financial sector for more than 13 years. Currently, he is Deputy Director of the Financial Technology Department of the Astana International Financial Center in Kazakhstan, and Head of Cross Coin in Singapore.
Cross Coin has a call option for 33% of shares in SPV Starta Accelerator 16/17, a company that owns 7% of shares in each of the 20 startups and 2% of shares in the 21st startup, all of which passed the Starta Accelerator programs in 2016-2017. Each of the companies within the pool has a market-value appraisal of $1.9 million or more.