OMERS Enters Crypto Market with RTO-Created Ethereum Capital

January 29, 2018

Another company is taking advantage of the advantageous Canadian ecosystem that allows blockchain and cryptocurrency companies to flourish.

One of the largest pension funds in Canada, OMERS, is entering the cryptocurrency sector through the newly-formed Ethereum Capital Inc. That new company announced a private placement co-led by Canaccord Genuity and CIBC Capital Markets to sell 20 million total subscription receipts, totalling $50 million and closing by February 16.

After the financing completes, Ethereum Capital will merge with the publicly-traded shell company Movit Media. Those who bought subscription receipts will receive equal shares of the newly formed Ethereum Capital Corp.

Ethereum Capital’s strategy will be, strangely enough, to invest in ethereum and related businesses. The company will buy ether tokens to hold, while also looking to purchase controlling stakes in ethereum-related businesses.

“The Ethereum network is just beginning to demonstrate its potential, with a greater number of transactions and applications being created almost daily,” said Joey Krug, a director of Ethereum Capital and co-founder of Augur. “I believe it has the potential to disrupt many existing industries and am excited to advise Ethereum Capital due to its position to capitalize on the most promising of these resulting companies through strategic acquisitions.”

Many believe ethereum is a better long-term investment then similar cryptocurrencies like bitcoin as ethereum’s network facilitates transactions with an intermediary and relies on smart contracts. The network also has a wide range of decentralized apps, including one that lets you buy, breed and trade kittens.

The board of Ethereum Capital will feature some well-known names in both cryptocurrency and Canada’s venture ecosystem. John Ruffolo, the executive managing director of OMERS Platform Investments; Boris Wertz, founding partner of Version One Ventures and an investor in cryptocurrency exchange Coinbase; Ben Roberts, co-founder and CEO of Citizen Hex; and Som Seif, founder and CEO of Purpose Investments are just a few board members.

“I am extremely excited to announce the launch of Ethereum Capital with support from our partners including Purpose Investments, Citizen Hex, L4 and OMERS,” said Seif. “We are pleased to offer investors a company that will provide exposure to the growing blockchain sector backed by the expertise of an industry-leading team of advisors.”

This new cryptocurrency offering is one of the larger ones to emerge from the suddenly-busy world of blockchain RTOs on the TSX. First Coin Capital, along with their investor-owners Galaxy Digital, completed an RTO with Bradmer Pharmaceuticals earlier this month in the same vein as Ethereum Capital and Movit Media.

During that process, First Coin’s co-founder Sean Clark noted how packed the sector would become, and how many companies will flock to Canada and the TSX/TSXV to search for institutional investment.

“It’s truly a unique moment in time,” Clark told Techvibes last week. “You’ll see 50 blockchain companies go public through the RTO structure in Canada, and that’s a good thing because it accelerates the whole space.”