Luxury car startup BitCar has revealed what you do when you initial coin offering doesn’t raise as much as you’d hoped.
The company, which is developing a Blockchain platform that offers cryptocurrency payments for fractional ownership of collectible car brands like Ferrari, launched an initial coin offering last year with plans to raise $25 million at the start of the year.
Punters could buy BITCAR tokens, with the business aiming to be the main cryptocurrency used in the auto sector.
The Bitcar platform would let investors pay by cryptocurrency for a slice of luxury vehicles, which the business planned to buy on their behalf and then hold for around 15 years, until they appreciate enough to sell.
The Australian business set up in Singapore for regulatory purposes and raised $S6.5 million in its token pre-sale
Its public sale netted just under $S3 million – bringing the total raise to $9.5 million earlier this year – less than half of the goal.
One token was worth US10c. According to Coin Gecko, it was trading for AU1.2c on Friday.
Bitcar management told Stockhead the smaller raise amount saw the company re-assess.
“Due to the smaller raise, BitCar have decided to burn unsold tokens from the ICO –– thus reducing the circulating and total supply,” the company said.
This means they’re essentially getting rid of the excess and improving the scarcity of the tokens they did sell.
The founders also said they planned to burn 50 per cent of their allocated tokens.
Despite the company not hitting the raise target, they’ve still got more than $9 million in cash and cryptocurrencies in the piggy bank to be used on developing their luxury car fractional-ownership platform.
Where are they up to?
“The BitCar Platform is currently undergoing development to be updated to a decentralised platform, users will be onboarded when the platform is live so we will be receiving metrics on user data then,” the company told Stockhead.