Blockchain-based services marketplace CanYa has completed Australia’s second-largest initial coin offering (ICO), raising $12 million in cryptocurrency Ethereum over a 30-day period via a crowdsale of its CAN tokens.
During that period, the 2015-founded startup also completed the acquisition of a majority stake in online bug bounty platform BountySource for an undisclosed amount, taking the platform’s 46,000 members under its wing in a move that CanYa co-founder Kyle Hornberg says is unprecedented in the ICO and cryptocurrency space.
“Over the past months we went to any blockchain or crypto conference we could get to — if it had crypto involved with it, we were there. At one of those conferences we became aware of BountySource and the interest the founders had to exit the business,” Hornberg told StartupSmart.
“We realised their company and values were directly aligned with ours, and as was the other major stakeholders. From there, the dominos began to fall — we saw the opportunity and took it.”
Right in the midst of their own ICO, Hornberg acknowledges the CanYa team had their hands full, but with 46,000 users on BountySource’s platform, the acquisition opportunity was too good.
“This means we come out of our ICO with over 50,000 active users, and two demonstrable use cases for our tech. We had to strike while the iron was hot,” he says.
Not wanting to detract from the original services marketplace behind CanYa, the company has pooled together a new team to focus on running and integrating CAN tokens with the BountySource platform, while the founding team focuses on CanYa itself.
Overall raise exceeds $20 million
Combining its presale and ICO amounts, the blockchain startup raised a total of 11,013 in digital currency ether. Around 4500 of those were raised during the presale, and were valued at the time at a total of $1.5 million.
However, at the time of publication, those 4500 ether tokens are worth approximately $8.1 million, bringing the total amount raised to more than $20 million. The constantly fluctuating price of ether makes the raise amount quite difficult to definitively state, laughs Hornberg.
Despite this, the team will be keeping a chunk of their raised funds in ether, with the team being “bullish on crypto in general”, says Hornberg. However, he acknowledges it would be “naive” to keep all the funds in a volatile asset such as Ethereum, saying the funds have been diversified and will be actively managed to “maintain the integrity of the project”.
The startup’s CAN tokens will commence trading today on two online cryptocurrency exchanges, with “a few more” to announce in the coming days. The tokens are entering exchanges priced at $2, meaning the company’s market capitalisation is already exceeding $US80 million ($102 million), say the founders.
The team is hoping the tokens won’t go the same way as some others have upon entering secondary markets. Instead, Hornberg says they’ve been actively trying to discourage any “pump and dump” mentality.
However, though the ICO has been “their baby”, he acknowledges the token’s success is now in the hands of investors.
“We can only really affect a few things: getting a rock-solid team and pouring a lot of energy into our community. The proof will be in the pudding,” he says.
Development of the CanYa web app for launch in global markets is “well underway” for a launch in the first quarter of 2018, says Hornberg, with the team confident of hitting all of its roadmap targets.
Higher calibre ICOs on the way
With a spate of successful Australian ICOs raising at the end of 2017 — most notably Power Ledger’s $34 million raise and Horizon State’s $2 million — Hornberg believes the calibre of the raises will continue to improve. But, he says, the amounts raised may trend down.
“Everyone talks about a cryptocurrency bubble, and it may or may not be, but I do think the days of raising $200 million with just a good idea and a whitepaper are behind us,” he says.
“The community expects a higher calibre of ICO.”
The environment in Australia for completing an initial coin offering is also friendly from a government and regulation standpoint, with Hornberg saying the government is “pretty forward-leaning” when it comes to ICOs. However, Hornberg says a number of law firms the CanYa team consulting with were “completely in the dark” when it came to coin offerings.
“I think there’s some catching up needed on those avenues,” he says.
*The author of this article holds a small number of CAN tokens.
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