Sigil invests in Fairmint ahead of its strong 2022
A quick look into 2021 in crypto…
The crypto market has experienced a bull run for a considerable portion of 2021, surpassing $3 trillion in value. It was the year of the Layer 1 protocols (Solana, Terra, Cosmos to name a few) and the NFTs which brought the technology to the mainstream. 2021 was also great for the majors like Bitcoin and Ether hitting their all-time highs, returning 65% p.a. and over 400% p.a. respectively.
Not everyone realised, however, that DeFi blue chips and DeFi category in general actually had a bear market in 2021. Many DeFi projects underperformed USD in natural correction from the 2020 boom. Due to this boom and bust in the last 2 years many investors (Sigil fund included) decided to buy fundamentally strong DeFi products and “rotate back to value” in 2022 with them.
As a second big topic, while talking to founders and comparing valuations we realised that some of the super good projects were completely missed in the 2021 price action. They were in the stealth “BUIDL mode” and despite having increasingly great products and adoption metrics, they were overlooked in the 2021 buying spree. We think Fairmint is one of these projects.
Dipping our toes in the river the second time round
Bringing up the famous Heraclitus thought: “No man ever steps to the same river twice, for it’s not the same river and he’s not the same man”, it rings true to our investment experience.
Back in March 2020 our research team proposed to invest in Fairmint at the price of $0.71. However, at the time we turned the proposition down in the Investment Committee - we liked the product vision but had doubts about the pace of adoption for various scalability reasons. We were partially right, because Fairmint didn't shoot off in mass-market adoption in 2020 or 2021 yet. BUT:
- We reviewed the progress of their product and believe it is getting ready for adoption on scale in 2022.
- We spoke with the founders about adoption metrics and plans for growth which strengthened our conviction about 2022 being a very good year for Fairmint.
- We are now thrilled to join as investors and supporters. We bought in at $5.70 which we consider a great deal on a $35m valuation just before the take-off. Sometimes buying at $5.70 with a high conviction feels like a better deal than buying at $0.71 two years earlier.
We are bringing you a quick summary of the main points below.
Alright alright - but what is Fairmint?
Fairmint is the best example of "Web 2.5" project and currently it's the only solution on the market for turning Web2 companies into Web3 companies. Fairmint empowers companies to leverage their community using their own equity-backed $ACME token in a fully compliant manner.
It utilizes crypto in the background while providing UX with the familiarity and simplicity of Web2 apps, abstracting the complexities of blockchains away. Reducing the complexity means more users can start interact with crypto today, without even knowing it.
”With Fairmint, founders can tap into their community capital."
Why is it important?
The digital economy has been evolving and changing the relationship between customers and corporations. Individuals have switched from being passive consumers to being an essential value-creating force. Think Airbnb, Uber, Amazon, Facebook etc. Due to that, financially aligning stakeholders to the success of the company is now the strongest competitive edge that a company can build.
Crypto has shown the world the immense value and power that can be produced by rallying communities around a token. Every founder in the world now wants to build a Web3 company. Fairmint enables founders to do just that, compliantly.
How does it work?
Fairmint redesigned the entire user experience of issuing and accessing crypto-native securities. Fairmint customers let their community members share in their success by (i) letting them invest with just a few clicks and/or (ii) creating automated equity reward programs that can be integrated directly into their product using our API.
With cryptosecurities, Fairmint enables programmable equity.
Fairmint offers a full-stack solution with built-in compliance for companies to issue their own $ACME directly from their website (i.e., invest.customer.com). Bridging web3 technology (non-custodial wallets, USDC, smart-contract issuance...), with Web2 best practises, community members enjoy a seamless, fintech-like user experience. Customers get a full-fledged admin interface to easily run their own offering, customize their portal, and manage all their community members & compliance (KYC, KYB, AML, accreditation...).
Fairmint also brings a disruptive and scalable subscription-based model to an industry that has traditionally relied on short-term agreements and transaction fees.
For these reasons, we’re convinced that Fairmint will become part of the modern startup stack.
Sounds great. Who’s behind the project?
Led by 2 serial entrepreneurs, the Fairmint team is one of most acute teams on the market when it comes to crossing Web3 / crypto knowledge with deep securities laws & regulation knowledge - a critical asset to craft DeFi-native securities instruments. Fully distributed from day 1, Fairmint has successfully built a remote-first culture for A-players, all moved by the same urgency to reinvent capitalism. And they are supported by an engaged community of 300+ investors. We are proud to join the party.
Disclaimer: None of the above is financial advice and should not be treated as such. Sigil fund made its first allocation in Fairmint at $5.70.