Securitize has acquired crypto investing startup Onramp Invest. The deal follows a steep decline in dealmaking and funding activity in the crypto space triggered by regulatory challenges.
Onramp Employees to Join Securitize
Asset tokenization company Securitize is set to buy out crypto investment platform Onramp Invest. Under the terms of the deal, 18 employees of Onramp will join Securitize, which currently employs 150 people.
The move comes amid a sharp decline in deal-making activity and a challenging venture funding environment in the crypto industry. The two companies already had a business relationship before the acquisition.
Securitize provides users access to private capital from well-known funds such as KKR and Hamilton Lane, utilizing blockchain technology to tokenize the investments. The firm secured over $120 million in funding from investors such as Coinbase Ventures and Blockchain Capital and funds managed by Wall Street giant Morgan Stanley. Last month, Securitize launched the first tokenized securities under European Union’s (EU) Distributed Ledger Technology (DLT) pilot regime.
Before the takeover, Securitize struck a deal with Onramp to offer investment advisors access to tokenized investments. Asset tokenization has grown increasingly popular over the years, with proponents claiming that moving tokenized investments onto public chains significantly improves liquidity and transparency. The on-chain tokenized assets market is expected to hit $16 trillion in valuation by 2030.
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2023 Dealmaking Decline in Crypto
Onramp COO Ashton Chaffee told The Information that selling to Securitize was a lucrative opportunity, particularly considering the sharp slowdown in crypto dealmaking activity.
According to recent reports, only eight crypto-focused venture capital (VC) funds raised $500 million globally in the year’s first half. The figure adds up to only 2.3% of the total amount raised last year and represents a 90% decline in funds to receive funding.
The slump comes from a sharp downturn in cryptocurrency prices in 2022, prompted by high-profile collapses such as FTX, Terraform Labs, BlockFi, and more. Consequently, financial regulators, especially in the US, have been intensifying their crackdown on digital asset firms and crypto exchanges in 2023, further weighing on fundraising activity.
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About the author
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird’s US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
