New Competition For Retail Risk Appetite: Ondo Tokenises Private Companies

Ondo Finance has announced Ondo Private Markets, a product offering tokenised exposure to privately held companies, beginning with an unnamed pre-IPO artificial intelligence company. Ondon Finance is a blockchain technology company focused on tokenising real-world assets.

The first token is expected to begin trading on secondary markets this week, with 24/7 trading on permissionless blockchain networks. Ondo said exposure to companies in robotics, cybersecurity, biotech and infrastructure will follow.

Exposure is delivered through tokenised notes. Each note's payout is linked to the per-share value realised on the referenced company's common shares at a qualifying liquidity event, such as an IPO (initial public offering). The notes are obligations of their issuer, not shares, and carry no ownership or shareholder rights.

The tokens are freely transferable and can be used across decentralised finance (DeFi), the ecosystem of blockchain-based financial applications. Ondo said eligible investors will be able to enter, exit or adjust positions without waiting for a liquidity event.

Ondo Private Markets is available to eligible investors in permitted jurisdictions. The tokens have not been registered under the US Securities Act of 1933 and may not be offered or sold to US persons.

Ondo cited figures showing that 87% of US companies with more than $100 million in annual revenue are privately held. The product builds on the infrastructure behind Ondo's tokenised stocks and US Treasury products, which the company said hold $3.7 billion in total value locked (TVL, the value of assets deposited in a protocol) and more than one million cumulative holders.

"In the US, the majority of the investment options accessible for retail are public companies, yet 87% of companies with over $100m in revenue are private. That's where many of the leaders defining the next era of our economy are emerging, and retail investors can't access them today. Ondo Private Markets is built to change that, bringing tokenized exposure to the world's best companies with 24/7 trading on permissionless rails." — Ian De Bode, Acting CEO and President, at Ondo Finance.

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