Republic is the third largest equity crowdfunding portal in the U.S. and the owner of the largest U.K. portal, Seedrs. In March of 2021, they launched the “Realm Metaverse Real Estate" fund available exclusively to a handful of accredited investors. In December of 2021, they launched a Test the Waters (TTW) Regulation A campaign to open it up to all investors. It was incredibly popular and maxed out the entire $75 million reservation max in a very short time.
The fund primarily focuses on buying up virtual real estate in NFT games like Sandbox, Axie Infinity and Decentraland. After purchasing the land, the idea is to hold it long-term, while continuing to develop it into virtual shopping malls, event spaces and other communities. These types of communities can accrue ‘rent’ similar to real estate and provide ongoing income to the fund. This means investors in the fund get dividends like a normal real estate investor would, and as the metaverse land accrues in value, they can eventually sell for a big payday.
What likely attracted that $75 million in investments, however, is the fund's incredible performance. Between its initial March launch and the December Regulation A raise, the fund returned 145% on invested capital.
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But it seems everything hasn’t been going quite as well since. Crypto-based assets have dropped considerably since their 2021 highs, and the Securities and Exchange Commission (SEC) has been cracking down on the space since the FTX collapse. Further, the raise has now been sitting in limbo, unable to take investors' funds since December of 2021.
Following SEC guidance and regulatory concerns, the TTW offering won’t be progressing. In a recent update, Republic said:
“Based on the feedback we received from the SEC as well as other regulatory events that have transpired since we began this process, we no longer see a path forward for this offering. Unfortunately, that means that as of now, the offering will be canceled...We are working on making the necessary adjustments to eventually bring a similar offering to market.”
While it’s likely funds performance has declined since its 2021 highs, the fund itself doesn’t seem to be closing. Instead, the Regulation A offering simply won’t continue. Fortunately, it does seem like the fund will continue in other forms, or a similar offering will arise.
For Investors: While this offering isn’t going forward there are plenty of other blockchain-based investments in the equity crowdfunding world. Gameflip, for example, is currently raising on StartEngine and has already $10 million from venture capitalists and over $810,000 from the crowd for it’s marketplace for gamers. Their marketplace includes both blockchain and non-blockchain-based digital assets gamers can buy and sell.
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This article Republic Cancels $75 Million Metaverse Fund Following Crypto Collapse and SEC Guidance originally appeared on Benzinga.com
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