Investment company First Growth Funds (ASX: FGF) has received positive news relating to its active investment in Acudeen Token, a blockchain-powered marketplace underpinned by distributed ledger technology and a unique crypto token.
In essence, Acudeen is a technology company that has developed its own online platform for “receivables discounting” – a path for small and medium-sized companies (SMEs) to finance their receivables in advance.
The technology could potentially deliver faster and more streamlined logistics for small businesses and could thereby become commercially lucrative as more businesses adopt blockchain and advanced computing to improve operations.
After securing a 20% stake of all Acudeen Tokens, First Growth has confirmed that Acudeen will listed on BTCEXA on 24 August 2018 – its maiden listing that will allow public access to the crypto token.
First Growth said it intends to convert these tokens to Australian dollars “as soon as practicable” as part of its stated investment strategy. Furthermore, Acudeen is likely to list on other exchanges that may also provide additional liquidity.
In addition to the tokens, First Growth is entitled to receive a US$250,000 (A$342,000) fee from the first US$1 million that Acudeen receives from the sale of its tokens.
First Growth is also in line to receive a further 6.25% commission as long as Acudeen receives a minimum of US$5 million (A$6.8 million) from the sale of its tokens.
Crypto market via Acudeen
Filipino company Acudeen is being backed by venture capital firm Seedstars, a Swiss “start-up competition” that invested US$500,000 in an emerging market start-up after reviewing over 6,000 applications.
Acudeen has developed a decentralised ecosystem bringing together all parties involved in the ownership transfer of movable assets such as invoices and warehouse receipts.
Acudeen’s software connects directly into corporations’ accounting software to validate the invoices of their suppliers. Upon validation, it disburses the money to suppliers within three working days.
Its AssetChain platform includes a marketplace to sell and purchase movable assets, includes identification and full KYC compliance features, and provides a fully-fledged system for risk assessment, ownership transfer, fund transfers and collections.
Acudeen is able to generate revenue by buying the invoices at a discount of 2% per month.
As an example, if a supplier has an invoice worth US$10,000 that’s maturing in 90 days, Acudeen would attempt to buy it for US$9,400 and as soon as the corporation fulfils the invoice, the start-up keeps the balance of US$600 as profit and then pays the bank for the credit line.
One of the key features underpinning the platform is a unique crypto token.
The Acudeen token will serve as the unit of exchange within AssetChain and is itself built on top of Stellar – the 6th largest digital currency in the world that’s currently worth around US$4.2 billion in market capitalisation, according to CoinMarketCap.
As a cryptocurrency Stellar works with major financial institutions, payment aggregators, and technical specialists including large blue-chips such as IBM, with a view of developing progressive ways of improving the global payments and reconciliation infrastructure.
In addition to its investment in Acudeen, First Growth is also pursuing other notable investments in the computing/internet of things (IoT) sector.
Last month, First Growth led the strategic investment into Penta Global, a US$500 Million market capitalised digital currency, to cornerstone its overarching investment in CCP Technologies (ASX: CT1).
CCP currently collects nearly 8 million points of data per month and says it is experiencing “double-digit growth on a month to month basis”. CCP could potentially record this data on the blockchain to create new services and revenue streams while adding value to its growing customer base.
First Growth executive director Anoosh Manzoori says that now is the “opportune” time to invest in CCP Technologies, following the company’s decision to go ahead with a A$250,000 investment last month.
As part of First Growth’s venture, Penta Global is also expected to co-invest in the company, thereby helping to accelerate its entry into IoT-based blockchain services.
“Their technology is fully developed and with the establishment of key channel partners, including Vodafone, Dicker Data Limited (ASX: DDR), Sigfox operators and now with Penta, CCP has a great growth outlook,” said Mr Manzoori.
One example of Penta’s participation, is its ongoing development of a blockchain solution for 30,000 rice growers in China, to be used for food security and supply chain management in the agricultural sector.
First Growth says that the solution provides growers, harvesters, milling operators, transport companies and retail outlets with data stored on the Penta blockchain, which improves reconciliation and record-keeping functions.
ASIC stumbling block
In response to the rampant growth in blockchain technology (and speculative activity following strong price increases), Australia’s national financial regulator – ASIC – has mandated that all Australian companies operating in the blockchain space publish explicit risk warnings.
First Growth has previously warned investors that “it is important to acknowledge the risk inherent in such a business model”, going on to say that “the risks in relation to digital currency exchanges apply equally to the sale of tokens and include the volatility of the token sale price, the need to establish a market for the tokens which have not previously been listed on an exchange and an absence of liquidity to enable token sales – any of which would reduce or eliminate any value that could be obtained from sale of the tokens.”
Today’s news of Acudeen’s token launch helped First Growth’s shares to gain 20% to reach A$0.012 per share by late afternoon.