Digital gold startup Bullion Asset Management raises US$1.3m led by ASX-listed Theta

DIGITAL gold startup Bullion Asset Management (BAM), incorporated in Singapore, has closed a US$1.3 million Series A round led by Theta Gold Mines, a gold mining company listed on the Australian Securities Exchange (ASX).

The round also drew investments from high net worth individuals and existing investors Decentralised Capital, which is backed by Singapore-based fund management firm Aura Group, and ASX-listed tech firm DigitalX.

DigitalX has agreed to invest an additional US$250,000 in BAM at US$1 per share to retain an equity holding of about 17.5 per cent. In 2019, it invested A$1.25 million (A$1.3 million) in the startup at A$1 per share.

BAM's subsidiary xbullion Holdings launched its digital gold token, which represents direct ownership in vaulted, audited and insured 9999 gold bullion, in September last year.

The token, "GOLD", currently trades against the Singapore dollar, US dollar, Australian dollar, baht and rupiah. Issuance has grown 50 per cent month on month since launch, said BAM.

Theta, which holds a range of prospective gold assets in a South African gold mining region, has entered into a strategic agreement with BAM that will allow it to acquire up to 15 per cent of BAM before Jan 17, 2022.

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Through the agreement, Theta's shareholders will have the option to receive Theta dividends in cash or in the GOLD stablecoin issued by xbullion.

The agreement also allows Theta to tokenise some of its future gold production to provide added liquidity, transparency and accessibility to xbullion's wider network of partners. The group will have the option to co-invest in up to 50 per cent of any gold mining asset acquisitions by BAM before Dec 31, 2025.

David Lightfoot, chief executive of BAM, told The Business Times that the fresh funds raised in the Series A round will be used for expansion, including educating investors on the benefits of digital gold and getting the gold-backed token listed on other digital token exchanges.

GOLD currently trades on Singapore-based platform Zipmex. Mr Lightfoot said the company is preparing for listings on another Singapore-based exchange and a Hong Kong-based exchange next month.

BAM's and xbullion's partners include StoneX, a Fortune 100 commodity trading house; Baird & Co, suppliers to the Royal Mint; Jaggards, Australia's oldest bullion and rare coin merchant; and BDO, an international audit firm.

DigitalX has signed a master service agreement with BAM that makes it the startup's preferred technology provider for the product roadmap.

BAM plans to launch more commodity-backed products in the near future, including tokens backed by silver and other precious metals.

"As the value proposition in precious metals and digital assets increases in the wake of global uncertainty, we continue to see and expect strong growth," said Mr Lightfoot.