As bitcoin becomes more widespread, drawing both individual and institutional investors, technologically savvy companies are seeing that tokens are becoming a more appealing form of pay, particularly for their younger employees. Paying staff in digital assets, on the other hand, might entail a slew of administrative headaches.
Human resources managers manually record who has been paid what on a massive Excel sheet, but because transactions are essentially decentralized, it’s easy to lose track of where the tokens are going. Because token holders are also shareholders in the corporation, changes in ownership can alter the balance of power and influence inside the company.
Sprout, which was founded three years ago, aims to make the ownership of digital assets more traceable and transparent for businesses. Andy Lee and Tony Sun, who formerly worked together at Mapbox, created the Hong Kong-based firm as a cap table software supplier.
It was assisting mid-sized firms in keeping track of equity as they grew, but when the price of Bitcoin soared to new heights last summer, the company began receiving requests from clients to assist with the management of employee tokens. Folium was established by Sprout in response to client demand for a tool that would allow businesses to track digital currency and non-fungible tokens across several blockchain platforms.
Folium starts by gathering people’s blockchain addresses, reading ledger updates, and categorizing them by ownership, such as whether it belongs to an employee, investor, or founder, and transaction kind, such as if it’s a paycheck or an investment. Sprout will have a token cap table available after all of the wallets have been tagged, just as it has for equity ownership. Keeping track of tokens provides creators, investors, and regulators more transparency, according to Lee.
“We believe there is a huge opportunity to assist traditional and crypto firms manage tokens,” said Lee, who formerly worked on Uber’s Asia business development, notably in China. “Crypto is the recompense of the future.” Sprout’s SaaS technology has found a sweet spot for managing both traditional stock and the burgeoning realm of digital tokens. With this two-pronged strategy in place, the business was able to get investment from Sequoia Capital India, which led the startup’s latest $3 million seed round.
Other investors in the round included Sovereign’s Capital and Firsthand Capital, both located in the United States, as well as Hong Kong’s NDN2 and government-backed entities in the special administrative region. Ruby Lu, a prominent angel investor renowned for her early stake on Kuaishou, TikTok’s Chinese adversary, was also present. Sprout is focusing its efforts on enterprises in Hong Kong and Singapore, which have developed as key crypto hubs. “In Asia Pacific, anecdotally, a lot of employees and individuals understand tokens more than stock,” Lee noted.
“Having tokens is actually appealing for a firm [in the region] to consider, especially if they’re expanding towards web3.” Sprout wants to expand in Singapore and add more product and technical personnel to its current team of 30 with the new funds. YAS Digital, a Hong Kong-based microinsurance company, and Animoca Brands, a crypto gaming company, are among the company’s early users, according to the company.
