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The Smarter Web Company, a UK-based publicly traded firm, has successfully raised $21 million through a novel Bitcoin-denominated bond offering. This groundbreaking financial instrument, developed in collaboration with French asset management giant TOBAM, marks a significant first for British capital markets and offers a unique approach to corporate fundraising.
A Pioneering Financial Instrument
The Smarter Web Company has launched what it calls "Smarter Convert," a 12-month bond denominated in Bitcoin. This innovative product was created in partnership with TOBAM, which invested through three of its managed funds. The bond is convertible into The Smarter Web Company shares at a 5% premium to its Tuesday closing price, setting the conversion price at approximately $2.73 per share. If all bonds are converted, the company will issue over 7.7 million new shares.
Key Takeaways
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Innovative Fundraising: The Smarter Web Company has raised $21 million via Bitcoin-denominated bonds.
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Strategic Partnership: The bond was developed and backed by French asset manager TOBAM.
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Market First: This represents a novel financial product in the UK capital markets.
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Investor Protection & Company Benefits: The structure offers downside protection for investors and allows the company to raise capital at a premium with reduced dilution.
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Bitcoin Exposure: The bond's value and repayment are tied to Bitcoin's price, offering investors digital asset exposure.
TOBAM's Commitment to Long-Term Alignment
TOBAM, which manages over $2 billion in assets, is no stranger to the cryptocurrency space. The firm has been an early institutional investor in digital assets, having launched the first Bitcoin mutual fund in 2017. TOBAM CEO Yves Choueifaty stated that the company is "driven by a commitment to long-term alignment," suggesting confidence in the long-term value proposition of both The Smarter Web Company and Bitcoin.
Flexible Structure and Repayment Options
The "Smarter Convert" bond offers flexibility for both the company and its investors. If the share price increases significantly, the company can force conversion. If investors choose not to convert, The Smarter Web Company will repay 98% of the bond principal in Bitcoin at maturity. The repayment amount will be adjusted to reflect the prevailing Bitcoin price at that time, exposing both parties to Bitcoin's price movements. The company has capped the total Bitcoin acquired through this program at 30% of its unencumbered treasury holdings to mitigate risk.
Strategic Advantages for The Smarter Web Company
CEO Andrew Webley highlighted the bond structure as a "first for the UK capital markets." He believes this new approach will attract a new segment of capital and complement existing funding strategies, supporting the company's ambition to become one of the largest publicly listed companies in the UK. The company noted that this structure could result in approximately 5% less dilution compared to a traditional equity raise under similar terms. The Smarter Web Company currently holds approximately 2,050 BTC, valued at around $234 million.
Sources
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Smarter Web Company Issues $21M of Bitcoin-Denominated Bonds, Cointelegraph.
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Smarter Web Company secures $21m in Bitcoin-backed bond from TOBAM, Proactive financial news.
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