INX and Republic will integrate TradFi and DeFi into both their ecosystems to create increased tokenization access and global market trading.
Financial services firm Republic has partnered with broker-dealer INX to develop a blockchain service for primary and secondary markets. The collaboration between both companies is part of an investment deal that sees Republic pump $5.25 million into INX. The transaction gives Republic 9.5% of INX’s outstanding shares.
The investment was calculated at a $50 million pre-money valuation. The two companies have also agreed to a non-binding term sheet that could see INX sell all of its common equity at a possible $120 million valuation.
According to an official statement, the two companies hope to improve global investor access to cryptocurrencies and enhance tokenization. The statement also highlights specific points expected from the collaboration between Republic and INX. The companies plan to democratize finance and create more investment opportunities via several means.
The Republic and INX partnership will see INX offer varying tokenized asset services to companies under Republic’s management. INX will list these companies for secondary market trading on its 24-hour ATS (Alternative Trading System). In addition, INX will integrate its conversion and trading solutions for cryptocurrencies into Republic’s platform. In return, Republic will integrate its FX broker-dealer services with INX.
The announcement states that INX and Republic will merge their traditional finance (TradFi) and decentralized finance (DeFi) prowess to create several compliant solutions for primary and secondary markets. In addition, the partners will build infrastructure that caters to the digital and retail economy.
INX and Republic Execs Comment on the Partnership
Republic CEO Kendrick Nguyen said fusing both companies’ products and expertise will change the funding landscape for all retail and institutional investors. For INX CEO Shy Datika, the plan is to create infrastructure for tokenization. Datika said:
“Our goal is to nurture and grow the global token economy by establishing the necessary infrastructure to not only support its operations but to also curate an investment experience that excites investors from all over the world. Through our collaboration with Republic as a strategic investor, we are creating a fertile environment for both traditional and digital assets to thrive.”
In May, INX reported financial results for Q1 2023, which included a net loss of $675,000. The report also showed unrealized gain on $3.8 million worth of INX tokens, and $0.2 million worth of INX token warrants. Excluding the token and token warrants, the company’s adjusted net loss was $4.7 million.
Other highlights on the company’s books for the first quarter include $18 million in cash and equivalents and $8.2 million worth of corporate bonds and treasury securities investments. INX also reported $24 million in working capital and $36 million in reserve funds.
Furthermore, the company incurred $4.5 million in net loss from operations in Q1 2023. However, its total revenue of $1.6 million for Q1 2023 is 119% higher than recorded in Q4 2022, although only 1% up from Q1 2022.
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