Image: Kaidi Ruusalepp, founder and CEO of Funderbeam, at the launch of Funderbeam Markets, April 2016, Facebook
The platform, which launched in April 2016, is the first and only of its kind in the world where growth companies get funded and traded across borders. It allows startups to raise capital from a global network of investors in nearly 100 countries, and lets anyone in the world invest and trade in growth companies.
The concept is similar to that of an equity-based crowdfunding platform, which essentially connects investors with private companies looking to raise funding in return for equity. But what makes Funderbeam unique is its secondary market which allows investors to trade securities amongst themselves, Kaidi Ruusalepp, founder and CEO of Funderbeam, told CoinJournal.
Funderbeam utilizes blockchain technology to secure investments and trades. It uses Colored Coins to represent digital rights to an investment agreement between an investor and the syndicate created to invest in a startup. As all transactions are recorded and verified by the blockchain, these Colored Coins can be traded on a liquid secondary market.
Founded in 2013 by Ruusalepp, the former CEO of Nasdaq OMX exchanges, and Urmas Peiker, a former regulator, Funderbeam was born out of the desire to transform the fundraising landscape and break down traditional barriers that limit access to global funds.
At the same time, the platform solves the three main issues for investors today: the lack of data to make informed decision, which it provides for free; the high ticket size, which is significantly lowered with co-investing; and the liquidity issues, which it solves with its secondary market.
“Imagine if Bloomberg, AngelList and Nasdaq had a baby,” Ruusalepp said.
Funderbeam, which is based in Tallinn, Estonia, is now working with strategic partners to enter new markets, with an immediate focus on South East European countries. In October 2016, the company signed a partnership with the Zagreb Stock Exchange (ZSE) to boost early stage investment in the region. The deal marked Funderbeam’s first steps into the region.
So far, the partnership has been “extremely successful,” Ruusalepp said, with three of the ten most funded startups in Croatia currently trading on Funderbeam.
The company has received the green light from the Slovenian regulator to begin operations there. It has already begun discussing with local startups and hopes to launch its first syndicate in Slovenia either in December or in early Q1 2018.
Funderbeam has raised US$7.3 million in funding so far and is backed by top notch investors including Jaan Tallinn, the co-founder of Skype, and Bitcoin-friendly venture capitalist Tim Draper.