Swarm Fund, which offers a blockchain for private equity, announced today the first funds to launch on its platform. One fund is a distressed real estate fund, the second is a pre-IPO secondary fund.
Swarm Fund offers a fully decentralized capital marketplace that makes traditionally exclusive investment opportunities much more inclusive.
The platform was conceived as a way to use blockchain to break the cycle where the rich keep getting richer, while the majority of investors either tread financial water, or worse, sit on the sidelines. Swarm aims to do that by opening up high-return asset classes – things like private equity and hedge funds, usually just the purview of the extremely wealthy or institutional investors -- to the masses. Simultaneously, it wants to bring the collective investment dollars of the crowd – which could add up to trillions of dollars -- to private equity and hedge fund managers, at a fraction of the cost it would take to manage those accounts in the current financial industry.
It gives smaller investors who don’t have the usual $5 million investment minimum sitting around access to high-return asset classes, while pooling access to more capital for managers, while cutting out the investment bankers and lawyers.
This video breaks down the basics:
The distressed real estate fund uses artificial intelligence and workflow automation to identify homes across the country that are in bankruptcy to automatically bid on those opportunities.
Compared to foreclosure sales, bankruptcy sales are typically streamlined to close quickly, and forego the public auction process, creating opportunities for investors who can identify them first.
Run by Silicon Valley veteran entrepreneur and investor Tim Jemison at NIAH Capital, the fund’s target is to raise the equivalent of up to $10 million USD to deploy into distressed real estate assets nationwide.
The pre-ipo fund focuses on deploying capital into the last round of institutionally-priced funding before companies (like Airbnb, DocuSign, Lyft) go public, investing alongside top-tier venture capitalists, to maximize returns, while reducing the multi-year investment timelines of many early stage venture funds.
“We are extremely excited to deploy Silicon Valley’s first cryptocurrency-powered technology fund,” said Haydar Haba, manager of Silicon Valley-based investment firm Andra Capital. “The Andra Capital team and I are true believers in the transition to the ICO model of funding and the platform Swarm is building. We are not only willing to back it with our own cash, but with a full integration between our platforms, and the new generation of ICOs that Swarm represents.”