A Platform designed by entrepreneurs, for entrepreneurs
The world of private equity is continuing to grow. This asset class is becoming more and more attractive as it has the advantage of being an investment that is easy to understand, that contributes directly to the real economy and also to innovation. Private equity therefore seems to be the ideal instrument for building the economy of tomorrow.
Nevertheless, the administrative management of these instruments still requires manual intervention and paper. The tokenisation of the economy, which places private equity at the top of the list of candidates, would allow these instruments to benefit from the expected advantages of greater efficiency, speed and accessibility to assets to make this market even more attractive. In this context, Equisafe has developed a digital tool that facilitates the creation and management of investment vehicles. The platform allows one to structure an investment vehicle, raise funds, deploy them to a target company and lastly delegate the entire management of the vehicle. Equisafe thus vertically integrates the entire value chain of non-listed equity/private equityinvestment from the back to the middle office.
This service allows entrepreneurs and investors to focus solely on the segment where they generate the most value: the sourcing and auditing of high-potential deals and future nuggets. The company has obtained two approvals, in order to provide a secure environment, thus meeting regulatory requirements. The management of financial flows is secured via the Payment Service Provider Agent approval issued by the Banque de France ACPR1, which ensures a robust infrastructure, in every respect equivalent to that of a traditional banking institution.
Equisafe and its partner LemonWay are also responsible for the identification of all the parties involved in the operation (investors, target company, managers/founders) through a Know Your Customer (KYC) process and lastly for Anti-Money Laundering & Counter Terrorism Financing (AML/CFT).
What is "SPV-as-a-Service"?
SPV-as-a-Service is a range of turnkey digital services to create and administer SPVs, or Special Purpose Vehicles, in record time. The sole purpose of the SPV is to aggregate an investor base through a share issue. The funds raised are then invested in a target company by acquiring part of its capital.
These services are used by various clients: Family Offices, Business Angel Clubs, Private Deal Clubs, etc. This offer gives entrepreneurs and financing professionals the optimal infrastructure to create their own SPVs, raise funds and monitor their investments efficiently. The offer ranges from administrative formalities with the Registry to the provision of a peer-to-peer marketplace, including electronic signatures, the provision of an escrow account and the onboarding of all investors.
In short, the platform allows one to aggregate investors by offering them an opportunity to subscribe to securities issued by the SPV. The neo-business bank thus replaces, in part, lawyers, accountants or administrators.
The Electronic shared registration system
The possibilities offered by the Sapin 2 law and the Pacte law open up a new path for non-listed financial securities. One of the main value propositions of the platform is the maintenance of the Register of Securities Movements in DEEP2 format. This “digitised” registry disrupts the traditional paper-based registry model, which is prone to human error and falsification. The foundation of blockchain-based record-keeping brings together the potential of private equity, and its potential gains, while ensuring the smooth and secure operation of securities exchanges between partners. The technology developed by Equisafe is based on the Blockchain using “Smart- Contracts”.
These Smart-Contracts, called NYX, executed on the Tezos blockchain, which is a blockchain using the energy-efficient proof-of-stake protocol, allow the automation of the rules for the transfer and issuance of financial securities in several European jurisdictions. This way, it is thus possible to obtain some liquidity on previously very illiquid assets.
The completion of the tokenisation of the AnnA mansion in 2019 by the Equisafe platform, which was the first transaction of its kind in Europe using this technology, is a good illustration. All related documentation was recorded on the blockchain. In addition to the transparency in this case, the documentation sharing really showed its potential with immediate and tangible benefits.
A web3.0 Venture Studio
Focusing on the new challenges of Web3.0 and Decentralised Finance (DeFi), the creation and development of the Venture Studio named PyratzLabs is a natural extension of the Group’s strategy. This new entity, entirely dedicated to the acceleration of start-ups developing Web 3.0 products, responds to the new challenges brought about by the emergence of disruptive technologies by reinventing digital property and value creation. The studio already has a dozen or so incubated projects, with different maturity levels. It is clear that in a world prone to change and innovation, the tokenisation of private equity type assets is of great interest.
1 Prudential Supervisory and Resolution Authority.
2 Electronic Shared Recording Device.
Bilal El Alamy, Co-Founder and Chief Technical Officer - Equisafe