News

Marc Degen, co-founder and Chairman, in conversation with finews.com

News

Marc Degen, co-founder and Chairman, in conversation with finews.com

Article

August 08, 2019

Katharina Bart, Senior Contributor at Finews AG discussed the rationale behind Modum’s token-equity swap plans and the promising future of the company with Marc Degen, our co-founder and Chairman. 

Read the original interview on finews.com 

Katharina Bart: Modum is swapping a token it issued in 2017's coin boom for an exchange-listed share. Chairman Marc Degen tells finews.com why the blockchain firm wants to move away from tokens as it seeks funding for its expansion.

Marc Degen, you issued tokens two years ago, which you now want to swap into shares. Have you lost faith in tokens?
Marc Degen: The catalyst is that Modum has reached the point where we are ready to scale up to reach our targets. We’re going to need significantly more capital to do so over the next 24 months. We want to do that from a position of strength.

What targets are you aiming for?
We measure ourselves on number of active shipments that our technology, which focuses on the pharmaceutical industry, is monitoring. A pilot project with a big drug firm shows that there is huge potential to streamline supply chains, warehouse management, and transport through blockchain technology. We aim for more than 10,000 monthly shipments on our technology this year.

But swapping your tokens for shares won’t get you more funds.
No, but going into fundraising with a token will prompt some questions, and effectively mean a discount on financing. We would prefer a plain equity setting so that we can get traditional funding, without factoring in a discount.

Are there any other reasons for proposing the swap?
The market for asset tokens like ours has proven somewhat arbitrary. Binance and other exchanges delisted tokens like ours. We would like a long-term solution for our securities.

What happens now?
We’re suggesting a swap of nine tokens for one share. One share equals one vote. Our token-holders will vote on whether they want to go through with this conversion. 

Is there any reason for them not to?
We expect a lot of our token-holders. Given we cannot or don’t want to make some things public, like our profit-and-loss statement, we’re asking them to trust us that swapping into shares is the best solution for everyone involved.

What if they say no?
I believe our community will back it, especially considering we’re on solid footing as a company. But I will respect their decision either way.

Did Modum pay a dividend on the tokens in 2018?
No.

Are you profitable?
We are booking certain profits, but have reinvested in the business.

Why didn’t Modum issue tokenized shares in the first place if that is the more sensible option?
That was the original plan, but the infrastructure wasn’t in place at the time. There were barely any market participants, and there was a lot of legal uncertainty. That’s changed since 2017.

Why did you opt for Daura, a joint venture of law firm MME and Swisscom?
We looked at several Swiss-based options and a few foreign offerings. We don’t want to rush things, but I had to make a decision based on what is operational now. The other projects we looked at weren’t ready to launch yet.

Looking ahead to next year, provided you have shareholders, not coin-owners, what type of financing are you looking at?
That’s yet to be decided: it could be debt, equity, strategic partnerships, joint ventures, or a capital increase on our existing shares.

How much would you like to raise?
In the double-digit millions. 

     

    Read the full interview in German.