Tokenization platform Etherfuse raises seed round at $12.5 million valuation

Etherfuse, a real-world asset (RWA) tokenization platform, has raised $3 million in a seed funding round.

White Star Capital and North Island Ventures co-led the round, with Stellar XLM +0.66% Development Foundation, FunFair Ventures, Department of XYZ, Anna Yuan of Solana SOL +2.29% Foundation and Alice Ann Schwartz of Rising Tide Network participating, Etherfuse said Saturday.

The startup began raising funds for the seed round in January and closed it in May, co-founder and CEO David Taylor told The Block. The round was structured as a simple agreement for future equity (SAFE) and brought Etherfuse's valuation to $12.5 million, Taylor, a former Apple and Boeing engineering leader, said.

Taylor added that the seed round brings Etherfuse's total funding to $5 million. The startup previously raised $2 million in a pre-seed round from friends and family, also via SAFE.

What is Etherfuse?

Etherfuse is an RWA tokenization platform co-founded by Taylor and his brother AJ. The platform focuses on tokenizing emerging market assets. "We didn't feel the U.S. would let us innovate on products that could be viewed as securities, so we went to Mexico where we felt we'd be able to develop a tokenized bond product," Taylor said. "Currently, we're the only Mexican peso-denominated yield-bearing asset in the world."

Etherfuse currently offers four short-term tokenized debt products: tokenized Mexican Federal Treasury Certificates (CETES), tokenized Brazilian National Treasury Notes (NTS), tokenized European Union bonds from Spain and Germany, and tokenized U.S. Treasurys, Taylor said. Etherfuse calls its tokenized products "stablebonds" as these are tokenized versions of physical bonds issued by sovereign entities.

Taylor said Etherfuse currently has about 10,000 Stablebonds holders, and the platform has a total value locked of about $2 million.

Etherfuse plans

The Etherfuse tokenization platform is currently live on the Solana, Stellar, and Base blockchains and plans to support more networks in the near future.

Etherfuse also plans to tokenize more assets. Taylor said the platform aims to have over 3,500 RWAs, including most governments' short-term debt and anything available on the Mexican stock exchange within the next 18 months.

"The vision is for Etherfuse to not only capture, but to expand the emerging bond market by removing the manifold barriers that currently prevent people and businesses from accessing the high, real and safe yields that these assets provide," Sep Alavi, general partner at White Star Capital, said in a statement. "Providing an API to the blockchain world that connects to some of the safest investment assets is hugely enabling for app developers, including those working with stablecoins, looking to build safer, higher-yield, and more stable products on-chain."

Alavi has joined Etherfuse's board of directors as part of co-leading the startup's seed round, Taylor said.

There are currently six people working for Etherfuse, and Taylor plans to add two more people for community development or growth functions. Asked if Etherfuse plans to issue its own native token in the future, Taylor said the platform doesn't have any plans to do so.

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