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.