As crypto becomes mainstream and attracts individual and institutional investors, digital-savvy employers are realizing that tokenization is an attractive form of reward, especially for their millennials.
But paying employees with digital assets can lead to all sorts of administrative problems. Hiring managers manually record who paid on a huge excel sheet, but can easily lose track of where tokens go because transactions are highly decentralized. And since token holders must also be shareholders of the organization, a change in ownership can change control and power within the company.
Sprout was launched three years ago and aims to make ownership of digital assets traceable and more transparent to organizations. The Hong Kong-based startup was founded by Andy Lee and Tony Sun, who worked together at Mapbox as a capitalization table software provider. It has helped mid-sized startups keep track of stocks, but last summer, as the price of bitcoin reached all-time highs, the company began receiving requests from its customers to help manage employee tokens.
Sprout created Folium in light of this consumer demand to help companies track digital coins and non-fungible tokens across various blockchain platforms. Folium starts by collecting the addresses of individuals on the blockchain, reading changes to the ledger, and labeling them based on ownership, whether it belongs to an employee, investor, or founder, and the type of transaction i.e. payroll or payroll. investments.
Once all portfolios have been tagged, Sprout will create a token cap table, just like stock ownership. Tracking tokens provides greater transparency for founders, investors, and ultimately regulators, Li said.
“We think this is a great opportunity to help traditional and cryptocurrency companies manage tokens,” said Li, who previously worked on developing Uber’s business in Asia, including China. “Cryptocurrency is the next generation of compensation.”
Sprout has been successful managing both traditional capital and the thriving digital token space through its SaaS platform. With this two-pronged strategy, the startup managed to secure funding from Sequoia Capital India, which led its recently closed $3 million seed round.
Other investors in the round included U.S. venture capital funds Sovereign Capital and Firsthand Capital, as well as Hong Kong’s NDN2 and state-backed funds from the Special Administrative Region. She was also joined by prominent angel investor Ruby Lu, best known for her early bets on Kuaishou, TikTok’s nemesis in China.
Sprout has previously targeted companies from Hong Kong and Singapore, which have become a major hub for crypto companies. “There are a lot of employees and people in the Asia-Pacific region who understand tokens more than stocks,” Li said. “So it’s very tempting to have company [in the region] There is something to think about, especially if they move to web3 with a token.”
With the new revenue, Sprout plans to add more product and technical staff to its current team of 30 and expand its operations in Singapore. The company declined to say how many customers it serves, but said Hong Kong-based micro-insurance company YAS Digital and crypto gaming company Animoca Brands are among its early adopters.