Frankfurt blockchain start-up Agora Innovation secures high six-figure investment from High-Tech Gründerfonds
February 25, 2019
- High-Tech Gründerfonds invests high six-figure sum in Frankfurt Blockchain start-up Agora Innovation GmbH
- Frankfurt based fintech Agora Innovation develops software for legally compliant transactions on the blockchain
The Frankfurt based fintech Agora Innovation secures seed investment from High-Tech Gründerfonds (HTGF): The blockchain start-up develops a platform-independent software, which enables global, legally compliant trading of tokenized securities (security token) with the Digital Ledger Technology (DLT).
The Frankfurt based fintech Agora Innovation receives 750,000 euro seed capital from High-Tech Gründerfonds in its first financing round. With IVE (Identity Verification Engine), the startup develops a software that links digital identities with anonymous crypto wallets for regulated and legally compliant (security) token transactions. This enables global trading of tokenized securities within legal frameworks on the blockchain.
“Our global economic and financial system will change dramatically in the coming years due to digitization,” said Phong Dao, co-founder and CEO of Agora Innovation. “As a reliable partner, we support our customers in profiting from the advantages of DLT and cryptographic technologies.”
With IVE, the start-up prepares the blockchain for regulated securities trading and institutional investments. The idea behind it: Digital identities will be linked to anonymous blockchain wallet addresses, enabling a verification of company and personal data for transactions involving security tokens (in primary and secondary markets) – a requirement for legally compliant trading of security tokens.
“We are convinced that the market for security tokens will grow strongly and at the same time see the challenge for issuers to meet the current regulatory requirements for security tokens in various jurisdictions,” says Dr. Ulrich Schmitt, the responsible investment manager, explaining the financial commitment of High-Tech Gründerfonds.
HTGF managing director Dr. Alex von Frankenberg praises Agora Innovation’s forward-looking business model: “We are very pleased with our fourth blockchain investment. Everything will be tokenized – real estate, company shares, works of art, raw materials, etc. An important component will be the identity solution IVE from Agora Innovation”.
Agora Innovation has started the development of IVE to solve a specific problem the start-up was facing. As a service provider for Initial Coin Offerings (ICOs), the founders realized early that this method of raising capital was associated with considerable regulatory risk. In the future, token offerings would have to be regulated and transparent: especially for so-called security tokens. In order to comply with the law, issuers must be able to trace exactly who owns tokens and which parties transact with tokens at all times.
Since there is currently no sound and practical solution and because the rules for trading tokens change frequently in many countries, the founders of Agora Innovation have started to develop IVE. IVE responds flexibly to new legal requirements, for example by supervisory authorities such as the German BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht) or the SEC (Securities and Exchange Commission) in the USA.
“The regulation of crypto markets is constantly changing in many countries around the world. This is an enormous challenge for token issuers,” explains Phong Dao. IVE can be configured individually to meet requirements for, e.g. “Know Your Customer (KYC)” processes in different jurisdictions worldwide.
“With IVE, the Agora team is developing a technical solution that will enable issuers to respond quickly to regulatory changes even after token issuance and only allow transactions that comply with the rules and regulations of different jurisdictions. In our opinion, IVE thus enables issuers to tap the enormous potential of the (peer-to-peer) secondary market”, Dr. Ulrich Schmitt says, pleased to support the team in the future.
Agora Innovation will use the capital from the financing round to expand the team, especially for product development. Moreover, the Frankfurt based start-up wants to partner with additional law firms, identity providers, exchanges and to accelerate its market entry.
Agora Innovation GmbH was founded in 2017 by Phong Dao, Evgeny Matershev and Robert Malec, who together have more than 40 years of experience in digitization in the financial sector. The blockchain start-up develops the platform-independent software solution IVE (Identity Verification Engine), which enables regulated and legally compliant security token transactions in different countries by linking digital identities with anonymous cryptowallets. Agora Innovation also offers various complementary services in the area of Crypto Currencies, Smart Contracts and Blockchain. With comprehensive business and technical know-how, the start-up accompanies companies and other institutions with their own initial coin or security token offerings.
About High-Tech Gründerfonds
High-Tech Gründerfonds (HTGF) is a seed investor that finances high-potential, tech-driven startups. With EUR 892.5 million in total investment volume across three funds and an international network of partners, HTGF has already helped forge more than 500 startups since 2005. Driven by their expertise, entrepreneurial spirit and passion, its team of experienced investment managers and startup experts help guide the development of young companies. HTGF’s focus is on high-tech startups in a range of sectors, including software, media, internet, hardware, automation, health care, chemistry and life sciences.
To date, external investors have injected over EUR 2 billion into the HTGF portfolio via about 1,400 follow-on financing rounds. HTGF has also successfully sold interests in more than 100 companies. Investors in this public-private partnership include the Federal Ministry For Economic Affairs and Energy, the KfW Banking Group, and Fraunhofer-Gesellschaft e.V., as well as the companies ALTANA, BASF, BAYER, B.Braun, Boehringer Ingelheim, Robert Bosch, BÜFA, CEWE, Deutsche Post DHL, Dräger, Drillisch AG, EVONIK, EWE AG, Haniel, Hettich, Knauf, Körber, LANXESS, media + more venture Beteiligungs GmbH & Co. KG, PHOENIX CONTACT, Postbank, QIAGEN, RWE Generation SE, SAP, Schufa, Schwarz Gruppe, STIHL, Thüga, Vector Informatik, WACKER and Wilh. Werhahn KG.