EGW Capital, the Blockchain investment bank, is in talks to raise the US $20 million ahead of its planned IEO. The company is currently in discussions with a few potential investors in Hong Kong and mainland China. The investors will receive EGW coins at a discounted price, assuring them of an appreciated exit in the market.
Blockchain investment banking is expected to outperform in the next few years with the aggressive adoption of crypto Tokenization. The company firmly believes that the preferred destination for the listing of shares and debt will be crypto exchanges instead of stock exchanges in the next few years. The regulatory hurdles concerning the security tokens will go away. The security token offering is already an option for the businesses who file their registration statement with the SEC. Since EGW Capital is a mix of both traditional and blockchain investment banks, the growth scope looks overall positive.
“The anonymous nature of the blockchain and its deep reach is already exciting several businesses. The year 2021 is a crucial year for us as we are targeting US $200 million in revenues, our own IEO, and an exit of some of our existing investors. We have some great projects in place, and achieving our revenue target is achievable,” said Rahul Kumar, CEO of EGW Capital.
Overall, the year 2020 brought 51.33% in value erosion for EGW Capital. The company is currently trading at a market cap of US $670 million. The EGW coin, which once peaked at the US $28 level, is now trading under the US $6.
The company’s forward split was put on pause by the existing investors but is expected to go through by the end of January. The feud is between some of the investors pushing the company to aggressively spend on marketing and foray into several countries and reduce its focus on India.
“EGW Capital has to achieve its revenue number quickly to scale back to its previous high. The time is excellent for the Tokenization to pick up. The revenue of US $200 million where most of it can be retained as profits can value the company way more than it’s previous highs. The multiples of 20-25 can bring the company in the US $5 billion market cap range. The company certainly has a first-mover advantage. Its core market is now okay with crypto and Tokenization, and the worst time is already over for the Blockchain space, ” said Supreet Singh of Crypto Analysis Forum.
EGW Capital is expected to conduct a private IEO instead of a public IEO. The IEO size is likely to be in the range of US $50-100 million. The low price of the EGW coin may force the company to trim its offering size to reduce dilution. The second tranche of the IEO will be conducted once the valuation improves.
The IEO proceeds will be used to build a crypto bank and scale its crypto listing and fundraising business.
The private IEO will result in the opening of public trading counters. The existing founders are expected to sell their holdings. Rahul Kumar, CEO of EGW Capital, has already clarified that he will dilute up to the US $15 million in the IEO and retail market.