ICO acquires $5m stake in 'real' company
Highlighting the ease of raising funds via ICOs vs the difficulty of obtaining traditional finance, Simple Token (OST) today announced that they have invested $5m in the photography platform Unsplash through a combination of 80% USD and 20% in OST tokens. Unsplash is the self described market leader in high quality, free to use, digital photography, and is the the fastest-growing photography platform since Instagram. As Unsplash stated, "We were growing fast but we weren’t going to figure out the right economic model with the amount of cash we had in the bank."
Enter the easy money of the ICO.
OST raised over 46,000 ETH in late 2017, worth c. $40m today, and has seen its market cap surge to $250m before falling back by 80% (like everything else) and resting at c. $85m as of today. At ETH's all time high OST would have had c. $80m in ETH burning a whole in their pocket, a sum that must make 'normal' companies green with envy.
Unsplash's vision is to democratise photography. As such, blockchain is a natural fit, just as it is for many of the creative industries - not only does it remove the middleman taking a cut, but it also allows for micro payments and better and more transparent copyright recording than existing systems.
As Unsplash CEO Mikael Cho states, "Photography has never been more valuable than it is today. But the traditional licensing model is no longer a fit to capture it. The creative needs for photos have shifted and the value attached to licensing a photo is accelerating downward."
Details on how OST and Unsplash are going to work together are hazy at present. Presumably it will involve tokenising all photos on Unsplash to track usage/copyright and payouts to photographers.
Regardless of how the partnership came to be, if blockchain and the current crop of projects are to survive these are the exact sort of partnerships that need to be made. Blockchain will likely find quickest adoption when it is used to further the activities of 'real' companies through improving their processes and systems, particularly in industries such as this where the status quo isn't working for many. On the surface, it is a great fit and a demonstration of OST's vision to provide all companies with the "benefits of a blockchain infrastructure without the high costs and risks of building everything yourself from scratch."