Republic is the third largest equity crowdfunding portal in the US and the owner of the largest UK portal, Seedrs. In March 2021, they launched the “Republic Realm Metaverse Real Estate Fund” available exclusively to a handful of accredited investors. In December 2021, they launched a Test the Waters (TTW) Regulation A campaign to open it up to all investors. It was incredibly popular and maxed out at $75 million in bookings in a very short time.
The fund primarily focuses on buying up virtual real estate in NFT games such as Sandbox, Axie Infinity and Decentraland. After buying the land, the idea is to hold it for the long term, while continuing to develop it into virtual malls, event spaces and other communities. These types of communities can incur “rent” similar to real estate and provide ongoing income to the fund. This means that investors in the fund receive dividends like a regular real estate investor would, and as the metaverse land increases in value, they can eventually sell for a big payday.
What likely attracted that $75 million in investment, however, is the fund’s incredible performance. Between the initial launch in March and the increase in December Regulation A, the fund returned 145% on invested capital.
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But it seems things haven’t been going so well since. Crypto-based assets have fallen significantly since the 2021 highs, and the Securities and Exchange Commission (SEC) has cracked down on the space since the FTX collapse. Furthermore, the increase has now been in limbo, and has not been able to take investors’ funds since December 2021.
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Now the SEC has officially shut it down, so the fund will not move forward. 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 path forward for this offering. Unfortunately, that means that as of now, the offering will be canceled…We are working with making the necessary adjustments to eventually bring a similar offering to the market.”
While it is likely that the fund’s performance has fallen since the 2021 highs, it does not appear that the fund itself is about to shut down. Instead, the Regulation A offer will not continue. Fortunately, it appears that the fund will continue in other forms, or a similar offering will arise.
For investors: While this offering is not moving forward, there are many other blockchain-based investments in the equity crowdfunding world. Gameflip, for example, is currently raising on StartEngine and already has $10 million from venture capitalists and over $810,000 from the crowd for its marketplace for gamers. Their marketplace includes both blockchain and non-blockchain digital assets that players can buy and sell.
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