Smarter Web Company Issues $21M of Bitcoin-Denominated Bonds

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Convertible bond priced at premium A different way to fundraise

The Smarter Web Company, a publicly traded UK-based company holding Bitcoin on its corporate balance sheet, raised $21 million through a Bitcoin-denominated bond offering, marking a rare move in British capital markets.

In a Wednesday London Stock Exchange announcement, The Smarter Web Company disclosed it had launched a Bitcoin-denominated bond that has already raised 15.8 million British pounds ($21 million). The bond was offered in a fully subscribed round backed by the French asset management giant Tobam.

The new product, “Smarter Convert,” was designed in partnership with Tobam, with the French company investing through three of its managed funds. Tobam CEO Yves Choueifaty said that the company “is driven by a commitment to long-term alignment.”

Tobam — which claimed to have over $2 billion in assets under management at the end of 2024 — is not new to the cryptocurrency space. As early as 2017, it announced the creation of the first Bitcoin mutual fund, designed to provide access for institutional investors.

The Smarter Web Company’s CEO, Andrew Webley, said the bond structure is a “first for the UK capital markets.” He added:

“We believe that this new structure will open up a new segment of capital for the company and complement our existing funding strategies as we pursue our ambition to make The Smarter Web Company into one of the largest publicly listed companies in the UK.”

Convertible bond priced at premium

The offering was centered around a 12-month bond denominated in Bitcoin (BTC) that is convertible into The Smarter Web Company shares at a 5% premium to its Tuesday price of $2.60. The resulting conversion price is about $2.73.

If all bonds are converted to stock, The Smarter Web Company will issue just over 7.7 million new shares. Still, if the share price rises by 50% above the conversion price for 10 consecutive trading days, the firm can force a diversion.

Diversion, in this context, refers to an issuer-forced swap from the bonds to company shares. If the holders do not convert to the shares, the company will repay 98% of the bond principal in Bitcoin at maturity, with repayment adjusted to reflect the BTC price at the time.

A different way to fundraise

Since the bond is priced in Bitcoin, repayment amounts will fluctuate depending on the price of the world’s first cryptocurrency. The offering allowed The Smarter Web Company to raise capital without immediately diluting its share value, while still increasing its Bitcoin holdings.

“The Smarter Web Company achieves a capital raise at a premium based on the Conversion Share Price being higher than the Reference Share Price, resulting in approximately 5% less dilution compared to a traditional equity raise, at the issue date of the bond,” the announcement said.

The announcement followed The Smarter Web Company adding to its BTC stash throughout July. According to data from BitcoinTreasuries.NET, the firm currently holds 2,050 BTC, worth around $234 million, after its latest buy at the end of last month, that added 225 BTC to its coffers.