Havas Blockchain, Psion Finance and Tokeny have joined forces to create ST8, a digitized financing solution,designed specifically for French SMEs looking to raise capital. Due to new regulation in France, the AMF has exempted offerings below 8 million euros from having to create a prospectus, making the fundraising process more simple and cost effective for SMEs. ST8 takes advantage of this new regulation and combines this with best-in-class technology to open up a new financial instrument for SMEs that increases their chances of investment.
SMEs notoriously struggle with fundraising, a key driver to their creation, growth and productivity. These businesses currently operate in thin, illiquid financial markets with a low number of market participants. Tokenization, i.e. the act of issuing an asset using a blockchain infrastructure, allows issuers to access a more global investor network, automate existing processes, reduce operational costs and enable a greater transfer speed of ownership. These features reduce the barriers of entry for investor participation and encourage higher trading volumes.
Across European countries, SMEs are the core drivers to the economy. In France, 182,000 SMEs and mid-cap companies (Banque de France) employ under 7 million employees. However, In 2018, SMEs turned to credit-financing and 35 billion Euros were raised using this method (Banque de France). The appetite for investment seems to be there in the market, as a recent quarterly poll (February 2019) by The French Public Investment Bank (BPI) indicated that 59% of CEOs want to invest in 2019.
Paul Bougnoux
“ST8 is a strategic alliance between digital and finance. As technology has advanced, digitalization is becoming more and more useful for the financing needs of firms. Hence the fact that we are proud to participate in the creation of this consortium to carry a new, end-to-end digital financing solution. This offer is also built on our core expertise: the financing of French businesses, which is the core of our economy,” commented Paul Bougnoux, Psion Finance President (Largillière Finance’s subsidiary company, an independent M&A advisory firm for SMEs and mid-cap companies).
“In the near future, the tokenization of financial securities will become the main source of funding for SMEs. The benefits on both the buy-side and sell-side are overwhelming and allow for lower costs, and therefore reduce the barriers of entry for actors. It’s a matter of creating trusted and compliant tools in the ecosystem that these players can rely on. This is the main inception behind ST8, a 360° solution for a significant driver of the French economy,” stated Luc Falempin, Tokeny CEO.
Luc Falempin
Fabien Aufrechter
“The expertise of our three firms forms a complementary and strategic offer for companies looking for innovative funding solutions. The tech and reputational expertise we provide allows us to deliver an institutional grade service for our clients.” said Fabien Aufrechter, Head of Havas Blockchain.
ST8 is a bespoke financing solution for SMEs in Europe. Since July 2018, the AMF exempts operations below 8 million euros from the need to issue a prospectus with a visa (Article 211-2 of the AMF General Settlement). Such issuances regulated by the EU now provide an adapted and more flexible legal structure. ST8 participants will benefit from having their issuance communicated by Havas Blockchain, a subsidiary of Havas SA, a French multinational advertising and PR firm. Tokeny will handle compliant technology solutions needed for the security issuance and Psion Finance will allow issuers to lean on their consulting and financial expertise.
