Morgan Stanley, Blockchain Capital Lead $48M Funding for Securitize

Securitize, a digital assets securities firm, announced it has raised $48 million in a Series B fundraising round, co-led by Morgan Stanley and Blockchain Capital, the company said in a statement June 21. 

The round marks the first time a blockchain technology company has received major institutional funding from Morgan Stanley, said Carlos Domingo, co-founder and CEO of Securitize, in a tweet, “which is not only great for us but a great validation for the entire space that one of the largest US banks is placing this bet.” 

Overall, it’s a good thing for everybody that large financial institutions are getting involved in crypto start ups like Securitize, and while they are the first investment in the space, hopefully they are not the last one, Domingo said to Blockworks. 

In addition to Morgan Stanley’s funding, Securitize is adding Co-Head of Morgan Stanley Tactical Value Pedro Teixeira to its Board of Directors where Teixeira will join Domingo, Securitize co-founder and President Jamie Finn, SPiCE VC co-founder and Managing Partner Tal Elyashiv, and Blockchain Capital co-founder and Managing Partner Brad Stephens.

“We make long-term investments in businesses and asset classes that are ahead of the curve,” Teixeira said. “Our investment in Securitize is a sign that we believe in the growth and adoption of digital asset securities.”

The company was founded in 2017 and allows private companies to raise capital on its digital blockchain-based platform. 

“Historically we’ve been viewed as a crypto and blockchain company because that’s the technology, but you’re going to see a shift to focusing less on technology and more on what we actually do,” said Evan Wagner, head of brand and communications at Securitize, in an interview with Blockworks. “Fundamentally, we help companies raise capital and we help investors participate in the private markets which have been closed off to them for the most part.” 

New investors include Ava Labs, IDC Ventures, Migration Capital, NTT Data and Sumitomo Mitsui Trust Bank and no valuation is currently being disclosed. The round also included existing investors including Blockchain Ventures, Borderless Capital, Global Brain, Mouro Capital, Ripio, Ripple and SPiCE VC.

The funding was oversubscribed for the Series B round as the initial target for funding was lower but demand was “quite high,” which resulted in the current funding, Wagner said.  

Previously, Securitize raised over $2 million in a Series A round in October 2018, and more than $14 million in January 2020, Wagner said.

The company hopes to use the funds to continue expanding and scaling key existing areas for growth operations as well as launching Securitize Markets, which has no official release date, Wagner said. 

Participants in the investment round and existing investors will receive their shares in the form of security tokens, or digital asset securities, through Securitize’s platform. The investors will join a group of over 300,000 verified investors and over 150 companies on the platform, according to the company. 

“On the platform, you will be able to access a range of opportunities whether it’s crypto yield funds or startups or real estate developments, you’re going to see a broader universe of primary offerings as well as secondary offerings,” Wagner said. “Looking forward, that’s the evolution you’re going to see and as more people become comfortable with crypto, it’s going to become the means for providing services that is taken for granted in public markets.”