In a bid to revolutionize SME financing, Kriptown has secured €4.2 million in Series A funding. This financial boost aims to establish Europe’s first stock exchange dedicated to small and medium-sized enterprises (SMEs), leveraging the European DLT Pilot Regime. The initiative could potentially reshape how financial markets operate, using blockchain technology to enhance transparency and liquidity. As SMEs constitute a significant part of Europe’s economy, Kriptown’s platform seeks to address the existing gap in equity financing solutions for these businesses. By providing access to new funding avenues, the platform may pave the way for substantial growth in the SME sector.
In recent years, the trend toward integrating blockchain within financial markets has gained momentum. Various companies have experimented with distributed ledger technology (DLT) to enhance transaction security and efficiency. However, Kriptown’s approach stands out by emphasizing a dedicated stock exchange for SMEs. This focus aligns with previous efforts by different fintech companies to democratize access to financial markets but takes a more targeted approach in supporting small businesses, which could significantly impact the economic landscape.
Why Focus on SMEs?
Kriptown’s decision to center its platform around SMEs stems from the crucial role these enterprises play in the European economy. Despite their significance, SMEs often face challenges in securing equity financing, limiting their growth potential. By offering a stock exchange specifically for these businesses, Kriptown aims to bridge this gap and provide a more accessible investment landscape. The focus on SMEs also aligns with the objectives of the European DLT Pilot Regime, which seeks to foster financial innovation through blockchain technology.
How Will Investors Benefit?
Investors engaging with Kriptown’s platform will gain access to shares in SMEs, with the added advantage of liquidity through a 24/7 secondary market. This model not only broadens the spectrum of PEA-PME eligible assets but also presents new opportunities for asset managers and individual investors. By integrating blockchain technology, Kriptown enhances transaction transparency, potentially increasing investor confidence and participation.
Kriptown’s infrastructure is set to combine the roles of Multilateral Trading Facility (MTF) and Central Securities Depository (CSD), ensuring instant delivery versus payment without counterparty risk. This integrated approach simplifies the trading and settlement process, providing a streamlined user experience. The recent submission of their DLT TSS (Trading and Settlement Systems) licence application to the ACPR signifies a crucial step in operationalizing this innovative platform.
The funding round was led by BNP Paribas, Bpifrance, and Centilux Family Office, highlighting strong institutional support for Kriptown’s mission.
“Having BNP Paribas and Bpifrance as shareholders strengthens our mission to create a dynamic financial ecosystem for SMEs. Our goal of reshaping market infrastructure aligns perfectly with their vision of innovation,”
stated Kriptown’s co-founder, Mark Kepeneghian. This endorsement from major financial entities underscores the potential impact of Kriptown’s initiative.
As Kriptown progresses with its platform launch, its influence on the financial market could be substantial. The focus on SMEs offers a unique value proposition, addressing unmet needs in the current financial landscape. The collaboration with established financial institutions enhances credibility and could attract more investors. Going forward, the platform’s success will depend on its ability to effectively support SMEs and maintain robust investor engagement, thereby contributing to a more dynamic and inclusive financial ecosystem.
