Security Token Exchange

Vertalo, a noteworthy player in the realm of digital asset technology, has made waves with its recent funding events and the release of its enhanced tokenization platform in 2023.

Funding Rounds

Vertalo has reported two funding events so far this year. In April 2023, Vertalo closed its Series A Extension Round, raising more than $4m at a $30m pre-money valuation, a 2x pre-money valuation step-up from its 2021 Series A post-money valuation of $15m.  The Series A Extension Round was led by SputnikATX, and joined by existing investors Shasta Ventures, Naples Technology Ventures, Quansight Initiate, as well as new investors such as Tomahawke Capital Partners LP and ELP Strategic Asset Fund, LLC.

Subsequent to the closure of its Series A extension round, Vertalo received additional investment from the Family Office of Jonah Yokubaitis, the former CEO of Data Foundry, the data center giant that he founded while at the University of Pennsylvania and sold for $420 million in 2021.

Tokenization Platform Upgrade

In addition to the recent funding news, Vertalo recently announced the availability of a new version of its tokenization and digital transfer agent platform that can be implemented on an institution’s first-party cloud architecture.  This is a major security, scale, and cost improvement over white-labeled services hosted on 3rd party websites:  https://chainenabled.substack.com/p/the-vertalo-api-standard

Dave Hendricks, CEO of Vertalo, believes that the adoption of regulated digital asset technology has been slowed by the reluctance of large institutions to allow third-party digital asset vendors to host and safeguard their valuable and proprietary investor and asset data.

“It’s one thing to raise money and trade shares, traditional or tokenized, on a third party’s web service.  That’s always been the case and that market is steadily modernizing.  But when it comes to 3rd party hosting or processing of investor information and the data about the assets they hold, that’s where large institutions get nervous. 

Chief Security and Risk Officers are understandably cautious after decades of security threats.  They’ve hardened their silos, but the effect has calcified internal systems and processes, especially in asset management, transfer, and custody functions.”

Institutional Interest

Vertalo has recently been seeing strong interest by institutions in both tokenization and updated transfer agent offerings as private capital markets increasingly evolve from older Web2 technology to more modern API-based and digital asset infrastructure.  This offering, in development for more than 2 years, now offers large financial institutions the ability to control this entire process, and with Vertalo’s API-first design, they can integrate digital transfer agency and tokenization with their existing legacy applications and processes.

“Clients using Vertalo’s platform have issued more than 300 offerings, 70 of those tokenized, and continue to do so in growing numbers.  But existing assets, held by custodians and asset managers, are not getting tokenized by external vendors, and the security, risk, and cost issues are what is holding it back.  With Vertalo’s first-to-market 1st party cloud offering, large institutions can offer, manage, and transfer digital de-materialized or tokenized assets without having to use a third-party vendor’s cloud architecture. 

If you choose Vertalo, you can implement it within your secure environment and have full security and data privacy. And with Vertalo’s APIs, you build your own interfaces, workflow, and can safely connect with counterparties without having to make a choice of public or private blockchains, since both are supported.” – Vertalo CEO, Dave Hendricks

Interest in digital transfer agency and tokenization has been reported across the global finance press as banks and custodians have continued to take interest in and investigate ways to increase efficiency in back and middle office operations as well as the opportunity to create new, regulated investment products that excite buyers.  Most large financial institutions and regulators have issued research reports or performed pilots of value transformation and transfer, such as JPM’s Onyx project and Goldman Sachs Digital Asset Platform (DAP).

The interest in regulated digital asset technology has increasingly been heard from the stages at conferences in the digital asset industry, where buzz has recently and decidedly shifted away from crypto currencies, Defi, and NFTs to what is largely referred to as ‘Real World Assets’, or ‘RWA’.

Even Messari’s crypto-focused MainNet conference caused Business Insider columnist Phil Rosen to comment: “In contrast to previous years when the halls were full of tech bros and Reddit enthusiasts, most of the 3,000 attendees were buttoned-up professionals representing companies or brands.”

Vertalo has seen interest from buttoned-up firms around the world, but the AsiaPacific region has regained its status as a nexus for digital asset activity of all varieties.  Whereas the US SEC has seemingly been focused on ‘regulation by enforcement’ actions, traditional central bank institutions such as the Monetary Authority of Singapore (MAS) have launched their own initiatives such as Project Guardian.  At the recent Digital Asset Week conference in Singapore, representatives from the MAS encouraged members of the regulated digital asset community to focus on interoperability rather than on walled gardens, which stifle cooperation and commerce.

Vertalo has been increasingly looking to AsiaPacific and recently appeared on stage in Singapore with a Japanese partner, Sumitomo Mitsui Finance and Leasing.  In July, Vertalo was selected by the US Department of Commerce’s Trade.gov to join its AsiaPacific FinTech Mission in November.  Vertalo and other companies will meet with Japanese financial institutions, regulators, and diplomatic personnel and then go on to Singapore to attend the FinTech Festival and meet with other market participants, like the MAS.  After Singapore, the mission concludes in South Korea.

Learn more about Trade.gov‘s Fintech Mission to Asia here:  https://www.trade.gov/fintech-mission-Asia