Australia’s first Initial Coin Offering raises $34m

Andrew Munro 17 October 2017

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A bright idea.

Power Ledger has set itself the goal of solving Australia's energy crisis with blockchain, enabling neighbours to securely trade surplus energy from rooftop solar and other off-grid solutions. The success of its Initial Coin Offering, in which it raised $34 million, has Power Ledger's future looking bright ahead of commercial trials in New Zealand, Western Australia and Tasmania.

It's a "really solid war chest" Power Ledger CEO, Dave Martin told Business Insider.

An ICO is essentially an initial public offering for cryptocurrencies, where company "stock," in this case the currency itself, is released to the public in order to fund further developments.

Power Ledger's ICO haul was comprised of equal parts cash and digital currency, with about $17 million in cash, AU$6 million in bitcoin, AU$10.7m in Ethereum and AU$400,000 in Litecoin. In return, investors got a share of Pow Ledger's "POWR" tokens.

  • POWR tokens: A cryptocurrency in its own right, POWR tokens can be transferred on the Ethereum blockchain and exchanged for Sparkz.
  • Sparkz: Can be traded for electricity on the Power Ledger platform.

"Blockchain technology and cryptocurrency underpins our business offering," said Power Ledger chair Dr Jemma Green.

"The POWR tokens will be transferable on the Ethereum Blockchain and can also be converted to "Sparkz", which is the currency we have set up for users to trade electricity using the Power Ledger platform."

Where Power Ledger fits into Australia's energy market

Power Ledger launched its ICO only the month after ASIC released its first guidance paper on the regulatory framework for ICO offerings in Australia, and the rapid pace of change may have regulators scrambling to keep up.

In Australia's largely paralysed energy industry, ahead of the game might be the place to be. Power Ledger isn't the first energy startup to focus hard on renewables, but it's probably one of the most forward-thinking.

The increasing popularity of off-grid home and business energy solutions, like rooftop solar panels, is already cutting into the profit margins of traditional retailers. Finding a way to facilitate energy trading between individuals might be the way of the future.

Power Ledger is also looking towards the growth of electric cars and aims to have electric car solutions integrated into its system by early 2018. This might be an especially good match for Australia, where the lack of charging stations may be hindering growth. Other startups feel the same.

The success of its ICO looks like a vote of confidence from investors in Australia and overseas, and established Australian electricity retailers are also getting involved. Among other investors, Origin Energy has signed on for a three month trial with Power Ledger in order to explore the possibilities of peer-to-peer energy trading across a regulated network.

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