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Harbor, a San Francisco-based fintech startup, has tokenized the shares of iCap Equity’s four real estate funds managing over $100M in assets using the ethereum blockchain, CoinDesk reported.
In a press release dated September 16, Harbor said that this will allow iCap’s 1,100+ investors and 17 placement agents to compliantly buy and sell iCap securities with one another.
Chris Christensen, iCap Equity CEO, said that the high-yield investment opportunities offered by iCap typically have a 3 to 5 year lock-up period because they are based in real estate.
“Now, with Harbor, we are able to provide the same strong returns, but also an option for investors to more easily liquidate if desired. It provides the best of both worlds, and is a game-changer for not only real estate-based investments, but the entire alternative investment industry,” Christensen said.
Harbor said that blockchain-based private securities bring efficiencies and automation to the secondary transfer process, allowing issuers to lift transfer restrictions while maintaining total compliance with laws and control of the process.
“The use of blockchain technology will assist with the accommodation of investors with different time horizons in the same fund. This will aid investors who need liquidity by providing an early exit, while at the same time assisting other investors obtain access to alternatives that were previously closed,” said Michael Bradley, CEO, Bradley Wealth – one among the 17 broker-dealers that now have access to the platform.
The announcement comes as Harbor is trying to pivot from helping companies issue security tokens to providing the infrastructure for them to tokenize existing securities.
Harbor CEO Josh Stein told CoinDesk that the company has “evolved from crowdfunding and tokens to being the Salesforce.com” of the security token industry. It is supposedly based on the notion that if investors are interested in participating in initial coin offerings (ICOs) by projects with only a promise, they would “be excited” for backed tokens.
“We have shifted to be an enabling platform to help issuers and broker-dealers tap into the efficiency and liquidity benefits of the technology… We’ve built a white-label platform that addresses fundraising management (investor onboarding, digital subscription process), investor communications, and liquidity options including private marketplaces,” Harbor director of marketing Kevin Young told The Block.
Harbor, which has raised more than $40 million and is backed by Andreessen Horowitz, Pantera Capital and others, announced the first offering on its blockchain-based platform in November 2018 – a tokenized REIT representing $20M of private equity in a luxury student housing serving the University of South Carolina. However, the sale was called off this year due to “the issuer [being] unable to come to favorable terms with the existing mortgage lender,” a Harbor spokesperson told The Information.
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