Crowdfunding platform StartEngine said it is acquiring rival platform SeedInvest from Circle, best known for the USDC stablecoin, pending approval from the Financial Industry Regulatory Authority (FINRA).
“SeedInvest was acquired by Circle a few years ago, and it’s one of the largest players in equity crowdfunding. We are one of the top firms in the field. By acquiring SeedInvest, it puts us in a leadership position in the marketplace by having more investors than anyone and a lot more customers, companies that need to raise capital,” StartEngine CEO Howard Marks told CoinDesk.
“Since we’ve had this financial crisis in the last few months, a lot of venture capitalists have stopped investing in companies that ordinarily they were already supporting,” Marks told CoinDesk, explaining the rationale of the deal. “What they’re doing is helping those in their portfolio they believe are more promising and others they’re not going to provide capital for, which is understandable.”
Marks believes this opens up an opportunity to raise capital for those who have a promising future but not enough support from venture capitalists. “With the acquisition of SeedInvest, we’re going to almost double the number of users we have on our platform,” he said.
The price of the SeedInvest acquisition was not disclosed and Circle was not immediately available for comment when contacted by CoinDesk. Howard Marks is being advised on the deal by Kevin O’Leary, who continues to be an active investor and stakeholder in the digital assets space.
In March 2020, Circle said it was looking to sell SeedInvest, roughly a year after finalizing the buy, as it no longer fit into the company’s core stablecoin business.
“In June this year, Circle announced to employees the plan to divest itself of SeedInvest later this year as we pivoted to focus on our core business and drive USDC adoption. As a result, Circle has decided to sell SeedInvest’s customer base to StartEngine,” the firm said.
