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Mantra, a Hong Kong-based blockchain platform that offers real world assets (RWA) tokenization, has raised US$11 million in a funding round led by Shorooq Partners, a UAE-based early-stage venture capital (VC) firm that invests in startups across MENA and Asia.
The round also saw the participation of Three Point Capital, a US-based VC and private equity firm; Forte Securities, a UK-based independent and global financial group offering brokerage, custody and asset management services; Virtuzone, a UAE-based provider of company formation solutions, corporate services and tax consultancy; Hex Trust, a Hong Kong-based digital asset custodian that provides solutions for protocols, foundations, financial institutions, and the Web3.0 ecosystem; GameFi Ventures, a Hong Kong-based VC firm with a focus on blockchain games; Caladan, a Singapore-based tech-driven trading group that transacts cryptoasset; Token Bay Capital, a Hong Kong-based venture fund that invests in Web3.0 and crypto startups; BlackPine, a Hong Kong-based private investment company; Mapleblock, an India-based technology focused blockchain firm; and Fuse Capital, a Brazil-based investment firm focused on alternative assets.
Launched as a Layer 1 blockchain platform, i.e. the base blockchain architecture that is necessary to build a blockchain network, Mantra was built with a mission to enable RWA tokenization on a global scale. For the uninitiated, RWA tokens simply refer to digital tokens on the blockchain that are linked to or represent tangible assets like real estate, precious metals, commodities, art and collectibles.
With this, Mantra hopes to create more and more easily accessible investment opportunities, particularly in the Middle East and Asia. “One of the things that we’ve been focused on when building Mantra over the years is the fact that it is an onchain self custodial application,” says John Patrick Mullin, co-founder and CEO of Mantra. “This means that you have complete control of your assets and custody them yourself. There are perils of this. Dealing with private keys, dealing with smart contracts, dealing with wallet addresses can be confusing. So, we’ve done a lot of work and effort into stripping away a lot of these complexities. And we’ll continue to be heavily, heavily focused on creating an onchain experience that mirrors a more centralized or Web 2.0 user experience when transacting on chain.”
By promising a tangible, secure, and stable blockchain platform, Mantra thus aims to simplify the process of buying and selling assets which will further create new investment avenues, promote entrepreneurship, and attract global investors. But, as is common with novel or new investment opportunities, there may exist some within the region who are still skeptical about RWA tokens. To them, Mullin has some words of assurance to share. “Some of the benefits of transacting on chain, obviously, is the composability of the various different products across platforms within the ecosystem and on the chain, while at the same time maintaining control and custody of your own assets, so you don’t have situations like FTX [the Bahamas-based cryptocurrency exchange that went through a financial collapse in November 2022] happening again, where actually the exchange holds control of your assets in your wealth,” he says. “Of course, because we also are onchain, we can bring in other things like unique token incentives that entice users to participate and like enhanced upside and opportunities to earn more.”
Related: The UAE’s Crypto Powerhouse: Munaf Ali, Co-Founder And Group Managing Director, Phoenix Group
It was precisely the wide-ranging benefits that Mantra has inculcated into its model that led to it being recognized by the UAE-based tech investor Shorooq Partners. “At Shorooq Partners, we have been a leading fintech investor in the region, starting with our investments since 2017 with the likes of Sarwa, Lendo, Lean, Tamara; and one of the thesis we have been going deep since last year is the RWA thesis, that Mantra has been focusing on,” says Shane Shin, Founding Partner at Shorooq Partners. “As a leading VC, our job is to identify the next disruptive trend that will influence our day to day lives, and we believe RWA thesis will be one of the most innovative theses and Mantra is leading this wave. We also believe that Mantra has a unique value proposition of bridging a corridor between the Middle East and Asia with its focus on both markets/regions.”
Shin adds that Shorooq Partners’ investment in Mantra, in fact, could serve as quite the template for other tech entrepreneurs in the UAE and beyond seeking to raise funds. “First, really reflect on if you want to raise institutional VC money in the first place- not every business or journey fits/requires VC investment and it’s absolutely fine to grow without the VC funding,” he advises. “If you have decided to go through the VC funding route, what matters to us at Shorooq Partners is that the founders really take their journey and the problems they solve as a mission, not just quick bang for the buck or monetary driven. We back the founders who treat their company as a mission. Then, [there’s the question of] whether the company can scale to be a large company. As founders’ partners, we would like to be there for the founders to scale across countries, markets and regions and we see if we can partner with the founders who can do this.”
Shin then emphasizes that the RWA tokenization movement is one that could potentially create a favorable shift within the regional fintech ecosystem– a move that will certainly be welcome in the UAE, where the government is constantly encouraging innovation within fintech. “The RWA thesis is still nascent and with the growth of companies like Mantra, this will set the new precedents for integrating Web3.0/blockchain startups into the Web2.0/traditional industries,” Shin says. “In the end, our role as a VC is to back those companies who are disrupting the way it is currently done while leaving positive influence and impact for the development of our ecosystem. We have backed about 25 fintech investments and we believe fintech is one of the fundamental driving forces that will push our region forward.”
This vision for the future, in fact, forms the crux of the legacy that Mullin and his team at Mantra hope to create. “When it comes to the impact and legacy we hope to create within the wider fintech ecosystem in the UAE, we have obviously very significant ambitions, and that’s why one of the leading investors in the region has decided to back us and support us,” Mullin says. “We really believe fervently in the mission of bringing the financial ecosystem onchain and believe that asset tokenization done in a safe, compliant and easily accessible fashion is the way forward. This new influx of capital will be able to help really cement ourselves as one of the key players in the region.”
Indeed, with fresh capital under his belt, Mullin now hopes to allocate the funds across a three-pronged strategy: building regulatory-compliant infrastructure that adheres to global standards, empowering developers with the tools required to create RWA-focused protocols on the Mantra Chain, and expanding the tokenization of RWA while also seeking market opportunities in the MENA and Asia. “The two key things we want to accomplish this year is actually getting the chain into mainnet production launch, which we’re anticipating at the end of this year, or roughly around the end of Q3, beginning of Q4, and of course, enhancing our licensing capabilities,” Mullin elaborates. “We’re in the final stages of various licensing applications and we expect to get those across the line as soon as possible. Obviously, this will require manpower, and we’re actively hiring and looking forward to bringing on Tier 1 talent to support our vision of bringing the financial ecosystem on chain. We have a lot of different initiatives in terms of how we will support people to build on the chain and how they can actually create interesting RWA use cases for tokenization of all different kinds of assets. And these can include stuff like an ecosystem fund, grant programs, direct incubation, etc.”
One product by Mantra that has already set in motion some of the above mentioned targets is the Hongbai -its name a portmanteau of Hong Kong and Dubai- which is Mantra Chain’s incentivized testnet. “Hongbai is the next phase of our Mantra Chain testnet,” Mullin reveals. “We have done a phase one which was effectively a chain stability and infrastructure testing. Hongbai will actually be open to the general public for people to be able to test various different functions of the chain, different applications, staking, trading, asset tokenization, etc. We’ll have a number of different gamified experiences for people to be able to earn rewards, which is why it’s an incentivized testnet. So, the more participation that you would do, the more support you give to the ecosystem, the more ability you’ll have to earn. We’ve obviously raised funds to help develop this testnet ecosystem and we’ve got a significant amount of developers and projects and users both on Web2.0, as well as the Web3.0 side of things. Looking forward to participating on the testnet, but this is just a stepping stone for us to launch the mainnet later this year.”
This article is from Entrepreneur.com
