Thai fintech startup Fraction cleared its final regulatory hurdle and is on its way to helping property owners fractionalize their stakes in real estate, then sell the tiny pieces to small investors for as little as 5,000 baht ($150). The Security and Exchange Commission recently awarded Fraction a license to set up an initial coin offering portal, according to a statement released by the company on last Thursday. ICO portals screen listings of not only cryptocurrencies but all digitized assets in a blockchain, verifying issuers’ identities and suitability, and conducting due diligence. The license is essential for the services Fraction intends to provide. The company intends to help issuers digitize ownership of their assets, then digitally fractionalize that ownership so the pieces can be listed through an initial offering. The startup will also provide an Ethereum-based trading platform so these fractions of holdings can be traded.
Conventional share trading involves many intermediaries, such as financial institutions, brokers and a bourse, resulting in large fees. Fraction’s end-to-end service trims these costs. Eka, a former managing director and partner at New York-based financial advisory Lazard, said his company could aid in preparing prospectuses and clearing regulatory hurdles for initial offerings, thanks to his previous experience. Fraction is based in Bangkok and Hong Kong. Its first listed fractionalized assets are expected to be in Thai real estate. The company has signed a Memorandum of Understanding with large Thai property developers seeking initial offerings of projects with an aggregate value of over 15 billion baht ($462 million). The company looks to raise capital for an expansion plan that involves listing a variety of assets and expanding overseas. Art pieces, vintage cars and vintage watches could be candidates for new assets.