Republic is the third largest stock crowdfunding portal in the US and the owner of the largest portal in the UK, Seedrs. In March 2021, they launched the “Republic Realm Metaverse Real Estate Fund” exclusively available to a handful of accredited investors. In December 2021, they launched a Regulation A Test the Waters (TTW) campaign to open it up to all investors. It was incredibly popular, peaking at $75 million bookings in a very short time.
The fund primarily focuses on buying virtual real estate in NFT games like Sandbox, Axie Infinity, and Decentraland. After purchasing the land, the idea is to keep it for the long term, while continuing to develop it into virtual malls, event spaces, and other communities. These types of communities can accumulate “rents” similar to real estate and provide ongoing income to the fund. This means that investors in the fund earn dividends just like a normal real estate investor would, and as the land of the metaverse rises in value, they can eventually sell for a big payday.
However, what likely attracted that $75 million in investment is the fund’s incredible performance. Between its initial launch in March and the December Regulation A raise, the fund returned 145% on invested capital.
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But it seems that everything has not gone so well since then. Cryptocurrency-based assets have fallen sharply from their 2021 highs, and the Securities and Exchange Commission (SEC) has been cracking down on the space since the FTX collapse. Furthermore, the raise has now been in limbo, unable to take investor funds since December 2021.
Now the SEC has officially shut it down, so the fund will not progress. In a recent update, Republic said:
“Based on the feedback we received from the SEC, as well as other regulatory events that have occurred since we began this process, we no longer see a way forward for this offering. Unfortunately, that means that, from now on, the offer will be cancelled… We are working to make the necessary adjustments to finally bring a similar offer to the market.”
While the fund’s performance has likely declined from its 2021 highs, the fund itself doesn’t appear to be winding down. Instead, the Regulation A offer simply will not continue. Fortunately, it looks like the fund will continue in other guises, or a similar offering will emerge.
For investors: While this offering is not moving forward, there are plenty of other blockchain-based investments in the world of equity crowdfunding. Gameflip, for example, is currently raising on StartEngine and already has $10 million from VCs and over $810,000 from the crowd for its marketplace for gamers. Its marketplace includes both blockchain and non-blockchain-based digital assets that players can buy and sell.
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This article Republic Cancels $75M Metaverse Fund Following Crypto Collapse and SEC Guidance originally appeared on Benzinga.com
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