Neufund Announces New Investment, Will Pursue Financial Services License, Founder Zoe Adamovicz Comments on Plans

Neufund, an aspiring early-stage digital asset marketplace that connects investors with early-stage firms, has announced a €4 million investment led by Atlantic Labs and Udo Schloemer (founder and CEO of Factory Berlin). Additional investors in the round include Freigeist Capital and Dario Suter (founder and managing director of DCM).

Neufund states that the new funding round extends the company’s previous €3.4 million Series A round, conducted on the platform as a digital security in 2018.

The online investment platform says the funding will be used for obtaining a financial license, accelerating the development of new products as well as boosting its employee count.

In a public statement, Zoe Adamovicz, CEO and co-founder of Neufund, said from the outset they have always strictly followed financial regulations and developed our business around the understanding that digital assets should be regulated like financial instruments.

“With this round, we take a further step in this direction: additional financial license would allow us to expand our list of services and products, while adhering to our compliant and transparent approach. We are thrilled to start this new chapter, and we have big plans ahead​,” she said.

Christophe Maire, founder and CEO of Atlantic Labs, added that funding innovative entrepreneurs is very hard. Providing a platform based on security tokens is a breakthrough and an opportunity to solve this problem:

“We believe Neufund will not only help entrepreneurs but also impact the way people think about fundraising and even IPOs.”

Udo Schloemer, founder and Chairman of Factory Berlin and managing director of Viva Forever, said their participation is an investment in the market’s future. With Neufund they have a chance to more from closed groups in tech hubs to a global community … to exclusivity to inclusivity.

“Running an innovative business demands the courage and ability to deal with the constant ups and downs, and we’re impressed at how Neufund navigates this path. They are one of the most ambitious and audacious creators in the fintech sector, and we are thrilled to foster them via our renewed investment round.”

Dario Suter, co-founder and managing director of DCM said the world is obsessed with unicorns but in the space of SMEs and impact businesses, one can find great innovations that focus on continuity and steady generation of value.

“We are glad that Neufund’s team remains passionate about developing solutions to promote financial inclusivity and fund innovation beyond the unicorn universe, and we look forward to their future progress.”

Crowdfund Insider reported earlier this year Neufund had decided to halt all securities offerings as it sought a new path – moving away from digital securities. At that time, Neufund stated:

“We’ve been active participants of the discussions held at the Bundestag, engaged BaFin in a dialogue about our platform and blockchain’s solutions since 2016. We’ve been patient to their months [of] delayed decisions, last-minute requests, and announcements that harm the businesses. But the last months showed that financial authorities are not just slow, they are paralyzed with the fear of new technologies and avoid any dialogues or decisions hoping that someone else, like global corporations or other countries, would deal with it. Together with our investors, we agreed that there is no reason to wait for the institutional changes. Today we have announced the freezing of all upcoming fundraising campaigns and start working on the new product, which will let us continue bringing value to our investors and community.”

Obviously, Neufund has now decided to pursue a regulated path to offer digital assets. The company says it aims to prioritize and work closer with impact-driven small and medium-sized businesses (SMEs) that are, or could be, profitable while solving some of the world’s urgent problems and contributing to sustainable development.

CI reached out to Adamovicz with several questions. Our discussion is shared below.

So you will pursue online capital formation for early-stage firms after all. So what changed?

Zoe Adamovicz: We have always been stage-agnostic and proposed flexible fundraising: as an entrepreneur, you can be a startup or established business ready to grow; you can be a fundraising novice or curious veteran.

What has changed, however, is that our initial business model was based on a vision of a fully automated system, but the reality shows that clients need a more human approach. Though we have over 11000  investors from 123 countries registered on the platform, it is still mostly used by tech-savvies and innovators, simply because they aren’t afraid of blockchain-based products and understand how the technology works. We see a big opportunity here and are working to make our services even more accessible and user-friendly while launching additional services.

Besides, we aim to prioritize and work closer with impact-driven businesses, mainly SMEs, but in fact of any size, that are, or could be, profitable while solving some of the world’s urgent problems and contributing to sustainable development.

Which license will you be pursuing from BaFin?  And how long will this take?

Zoe Adamovicz: We’ll disclose more details in a few months.

Have you already engaged with regulators? Do you anticipate operating as a pan-European platform?

Zoe Adamovicz: We’ve always been engaged with regulators and were open to the dialogue. We have several essential licenses which allow us to conduct business, and act as a broker of investment assets (Vermögensanlagen).

In the past Neufund was assessed as not needing a license as a financial service provider – as an innovative Fintech we did not fit any boxes in the existing financial regulations. Thanks to the evolution of Fintech regulations, and the development of our own business, we now have more possibilities and have applied for one of the traditional financial licenses.

Did the recent changes to the European crowdfunding rules impact your decision?

Zoe Adamovicz: No, as the platform supposes publishing a prospectus we did not have cap limitations like traditional crowdfunding platforms had.

How did Atlantic Labs enter into the discussion? Are they joining the board?

Zoe Adamovicz: They were our investors almost from the beginning, and we are glad that they keep supporting us.

How soon do you anticipate you will start listing new securities offerings?

Zoe Adamovicz: Very soon and stay tuned! 2021 is the year to thrive!

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