Swedish cryptocurrency exchange Safello announced on Friday that it has secured 11 million Swedish Krona ($1.3 million) in funding. This capital is intended to support the company’s plans to go public in the first half of 2021.
The exchange aims to list on Nasdaq Nordic’s First North Growth Market. The investment was acquired through the issuance of new shares and came from Digital Currency Group (DCG), the parent company of CoinDesk. Existing stakeholders, including venture capital firms Northzone, White Star Capital, and Techstars, also maintain their equity in the company.
Strategic Path to Public Listing
Frank Schuil, CEO and co-founder of Safello, revealed that the team had explored alternative avenues for going public. One considered option was issuing tokenized securities via a digital offering. However, Schuil concluded that the underlying technology was "not yet mature enough for us to feel comfortable," leading the company to choose the more "traditional route" of a conventional stock market listing.
This decision underscores a cautious yet strategic approach to growth and regulatory compliance within the evolving digital asset space.
Building Regulatory Trust and Confidence
Schuil emphasized the significance of listing on Nasdaq's First North Growth Market, viewing it as a major milestone that demonstrates established trust with regulators. The Swedish Financial Supervisory Authority will be actively involved in the approval process, conducting a thorough review of the company and its prospectus.
This rigorous scrutiny is seen not as a hurdle, but as a valuable step in validating the company’s operations and long-term viability.
Timing the Market: A Bullish Strategy
Safello believes the current bullish cycle in the cryptocurrency market presents a favorable environment to announce its Initial Public Offering (IPO). Schuil pointed to the company’s history of strategic timing, noting, "We have always been successful with our timing. Our first investment round was at the peak of the 2013 bull market, and the previous round was at the peak in 2017."
He further elaborated on the company’s philosophy, stating a focus on the long-term prospects of cryptocurrency and blockchain technology. "While we see price volatility, we understand it, we can predict it, and our entire philosophy is to be profitable through the bear markets," Schuil added.
This approach highlights a business model designed to withstand market fluctuations and capitalize on long-term industry growth.
Advisory Team and Industry Context
To navigate the complexities of the public listing process, Safello has assembled a team of experienced advisors. The company has enlisted corporate finance firm Corpura Fondkommission as its financial advisor and the law firms Schjødt and Kassai Law for legal counsel.
This move aligns with a broader trend of cryptocurrency exchanges seeking public markets. Notably, this week also saw major U.S. exchange Coinbase file its S-1 registration statement with the Securities and Exchange Commission, signaling a significant wave of institutional maturation within the crypto sector.
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Frequently Asked Questions
What exchange is Safello planning to list on?
Safello aims to list on the Nasdaq Nordic First North Growth Market. This is a multilateral trading facility designed for growing companies in the Nordic and Baltic regions.
Why did Safello choose a traditional IPO over a tokenized offering?
The company's CEO stated that while tokenized securities were considered, the technology was deemed not yet mature enough for them to proceed comfortably. Opting for a traditional stock market listing was seen as a more reliable and established path.
Who invested in Safello's latest funding round?
The recent 11 million SEK round was led by Digital Currency Group (DCG), the parent company of CoinDesk. Existing investors Northzone, White Star Capital, and Techstars also maintain their stakes.
How does Safello plan to handle cryptocurrency market volatility?
According to its CEO, the company's business philosophy is built to be profitable through bear markets. They acknowledge volatility but have designed their operations to predict and endure these market cycles.
What is the significance of a regulatory review for a crypto company?
Undergoing a thorough review by a financial authority, like Sweden's, is a strong signal of regulatory compliance and trust. It adds a layer of credibility and legitimacy for investors and users in a industry often scrutinized for its regulatory status.
Is there a trend of crypto exchanges going public?
Yes, Safello's announcement coincides with similar moves from other major exchanges, most notably Coinbase's recent S-1 filing. This indicates a growing trend of crypto businesses seeking legitimacy and capital through public markets.