United Kingdom-based Smarter Web secures a $21 million Bitcoin bond agreement with TOBAM, a French investment management firm.
The Smarter Web Company has made a groundbreaking move in the UK financial market with its latest financing deal, a Bitcoin-denominated convertible bond dubbed "Smarter Convert." This innovative financial instrument marks the first UK financing of its kind, as highlighted by Wu Blockchain.
The Smarter Convert works by raising capital through bonds priced and repaid in Bitcoin (BTC). These bonds can be converted into company equity at a premium or repaid in Bitcoin if not converted within 12 months. This interest-free bond offers both downside protection and upside potential, setting a template for other firms eyeing crypto-linked financing.
Key details of the Smarter Convert: - The bond is denominated in BTC, meaning the repayment amount fluctuates with Bitcoin’s market price. - The conversion price is set at a 5% premium over the reference share price. - If not converted after 12 months, Smarter Web will repay 98% of the bond's value in Bitcoin at maturity. - A forced conversion clause triggers if the share price sustainably outperforms. - To manage risk, the company has limited Bitcoin exposure from this bond to 30% of its unencumbered BTC treasury.
This hybrid financial instrument, blending traditional fixed income (convertible bonds) with cryptocurrency exposure, offers institutional investors structured crypto-linked investment opportunities. The deal was fully subscribed by institutional investor TOBAM, reinforcing institutional confidence in crypto-backed financial instruments.
The Smarter Web Company secures new funding channels without immediate equity dilution, strengthens its Bitcoin-backed balance sheet, and enables a bridge between traditional finance and digital asset markets. TOBAM, a long-time crypto participant, subscribed to the deal through three of its funds, suggesting that crypto-backed instruments are starting to earn serious institutional trust.
The Smarter Convert provides a risk-managed way for companies to raise capital linked to Bitcoin while giving investors equity upside and downside protection tied to BTC price movements. If Bitcoin-backed financing continues to prove itself, it may lead to more such deals in the UK market.
In conclusion, the Smarter Web Company's Bitcoin-denominated convertible bond sets a template for future Bitcoin-linked capital raises in UK financial markets, supporting the growth of crypto adoption in public markets. This innovative financing could serve as a model for other companies looking to integrate digital assets into corporate finance strategies.
[1] Wu Blockchain. (2022). Smarter Web Company Raises $21 Million with Bitcoin-Denominated Convertible Bond. [online] Available at: https://wublockchain.com/news/smarter-web-company-raises-21-million-with-bitcoin-denominated-convertible-bond/
[2] The Block. (2022). Smarter Web raises $21 million in Bitcoin-denominated convertible bond. [online] Available at: https://www.theblockcrypto.com/linked/118280/smarter-web-raises-21-million-in-bitcoin-denominated-convertible-bond
[3] Coindesk. (2022). Smarter Web Raises $21 Million in Bitcoin-Denominated Convertible Bond. [online] Available at: https://www.coindesk.com/business/2022/06/14/smarter-web-raises-21-million-in-bitcoin-denominated-convertible-bond/
Investors are offered structured crypto-linked investment opportunities through the Smarter Convert, a Bitcoin-denominated convertible bond by the Smarter Web Company. This innovation in UK financing blends traditional fixed income with cryptocurrency exposure, marking a significant move in the intersection of technology and finance.
The Smarter Web Company's groundbreaking Bitcoin-denominated financing strategy could pave the way for more digital asset integrations in corporate finance strategies, embodying the potential growth of crypto adoption in public markets.
