Balance Software, a blockchain software startup from the UK, has raised $1.2 million through equity crowdfunding, eschewing the initial coin offering (ICO) route, which has become wildly popular of late for blockchain companies.
The company, founded by former staffers at Ethereum, Apple, and Stripe, is building a Mac wallet app for managing money and blockchain transactions. It raised funds through the Wefunder platform, which allowed anyone to invest in the company. More than 1,200 people invested in Balance.
“Despite all of the money flying around, we do not want to do an ICO,” said Richard Burton, CEO of Balance.
Initial coin offerings, or ICOs, are funding routes for blockchain-based projects where cryptocurrency tokens are issued to investors. Some projects have raised staggering amounts of money in little time, such as Filecoin raising $257 million this week.
The relatively nascent funding method and its inherent riskiness has started to come under scrutiny from regulators lately with the Securities Exchange Commission in the US indicating that tokens are equal to securities while the People’s Bank of China has outright banned ICOs. At the same time, there have been a number of reported cases of hacking and frauds in the ICO space where investors have been robbed.
The freshly raised funds for Balance will be invested in further product development.
“Today, lots of people are really excited about cryptocurrencies and blockchain apps, but very few people are using them on a daily basis. Balance will become a single place to see and exchange your banking and blockchain balances,” said Burton. “We have already shipped an app that integrated with 15,000+ U.S. banks which was featured by Apple and has hundreds of paying customers. Now we want to add support for every digital currency exchange in the world.”