Republic is the third largest equity crowdfunding portal in the US and owner of Seedrs, the UK’s largest portal. In March 2021, they launched the ‘Republic Realm Metaverse Real Estate Fund’, available only to a small number of accredited investors. In December 2021, they launched their Test the Waters (TTW) Regulation A campaign, opening it up to all investors. It was incredibly popular and blew up all of its $75 million booking cap in a very short amount of time.
The fund is primarily focused on buying virtual real estate for NFT games such as Sandbox, Axie Infinity and Decentraland. After purchasing the land, the idea is to develop it into a community such as a virtual shopping mall and event space while holding it for a long time. These types of communities can generate “rent” similar to real estate and provide ongoing income to the fund. This means that investors in the fund will get dividends just like regular real estate investors, and as the value of land in the metaverse increases, they can eventually sell it for a big profit.
But what likely attracted its $75 million investment was the fund’s incredible performance. Returned 145% on invested capital.
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Since then, however, not all seems to have gone well. Crypto-based assets have fallen sharply from their 2021 highs, with the Securities and Exchange Commission (SEC) cracking down on the space since the FTX demise. Additionally, since December 2021, we have not been able to receive investor funding and our fundraising is currently in limbo.
The fund will not proceed as the SEC has officially closed. In a recent update, Republic said:
“Based on the feedback we have received from the SEC and other regulatory events that have occurred since we began this process, we no longer see the future of this offering. … we are working on the necessary adjustments to eventually bring a similar offering to market.”
The fund’s performance may be down from its 2021 highs, but the fund itself doesn’t appear to be closed. Instead, the Regulation A offering will not continue. Fortunately, it looks like the fund will continue in some other form or a similar offering will take place.
For investors: While this offering is not moving forward, there are plenty of other blockchain-based investments in the equity crowdfunding world. For example, Gameflip is currently raising money on StartEngine and has already raised over $10 million from venture capitalists and over $810,000 from the marketplace crowd for gamers. Their marketplace includes both blockchain and non-blockchain based digital assets that gamers can buy and sell.
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