Hong Kong-listed BC Technology Group, the parent firm of regulated digital asset platform OSL, said on Friday that it has raised almost HK$543.2 million (about $70 million) from Singapore’s sovereign wealth fund GIC through a private placement.
The investment marks another crypto-related deal by GIC, which led an $80-million Series C round in US-based digital asset platform Anchorage in February. GIC also reportedly participated in US crypto exchange Coinbase’s $300-million funding round back in 2018, Bloomberg reported.
In the latest deal, BC Group disclosed that it had agreed to place nearly 32 million shares, which represents an over-7.6% stake in the firm, to GIC at a price of HK$17 ($2.2) apiece, per its filing with the stock exchange on June 11.
If the deal proceeds, BC Group will raise close to HK$543.2 million of gross proceeds. The net proceeds, after deduction of all relevant expenses, are estimated to be about HK$535 million ($68.9 million).
BC Group, which generates the bulk of its revenues from the OSL crypto business, said that it plans to use HK$198 million ($25.5 million) from the net proceeds for IT-related costs including digital transformation, as well as developing and enhancing platform technology of its crypto business. It will also put aside HK$100 million ($12.9 million) for future expansion in markets like Britain, Singapore, and the US.
The remaining HK$237 million ($30.5 million) will be used as operating working capital other than IT-related costs, such as rental, marketing and staff costs, according to the filing.
Fidelity-backed BC Group is engaged in digital assets trading, brokerage, technologies, and services businesses in Hong Kong through OSL, the first firm in the Asian financial hub to have received a digital asset license from the local authority. OSL became licensed by Hong Kong’s Securities and Futures Commission (SFC) in December 2020 to operate regulated brokerage and automated trading services (ATS) for digital assets.
OSL said last August that it had also applied for an equivalent licence in Singapore that would allow the firm to act as a Major Payment Institution providing all dealing services associated with digital payment tokens.
Besides the crypto business, BC Group is also involved in the advertising business and the provision of business park area management services in mainland China.
BC Group reported revenues of 217 million yuan ($33.9 million) in 2020, up 32% year-on-year (YoY), according to the firm’s annual financial results.
Its core OSL segment contributed to 70% of BC Group’s income and revenues last year, an increase from 44% in 2019. The results show that the overall trading volumes on OSL’s digital asset platform leaped 228% YoY to 149 billion yuan ($23.3 billion), with its active customers rising 130% from one year earlier.