Solcon Capital, businessman Andile Ngcaba’s global investment firm, is exploring investment opportunities within the tokenisation of real-world assets sector.
This was the word from Ngcaba, chairman, founder and majority shareholder of Solcon Capital, speaking last week at Africa Tech Festival 2023, in Cape Town.
Convergence Partners Investments, the deep-tech investor founded by Ngcaba in 2003, rebranded to Solcon Capital in June, and is launching an international push to empower global deep-tech growth through platform economics.
Solcon specialises in sourcing and investing in emerging companies that demonstrate significant growth potential in Web3 technologies − such as generative artificial intelligence (AI), AI, big data, cyber security and space technology − across SA, India, Southeast Asia and Bangalore.
According to Ngcaba, the company is now exploring the concept of tokenisation of real-world assets, a trillion-dollar sector poised to revolutionise asset ownership and investment, through blockchain technology.
He explained the technology may radically overhaul traditional frameworks of investment and ownership – significantly lowering transaction costs, bringing transparency and greater liquidity into the equation.
Digital tokens can represent an array of assets, including real estate, bonds, company shares, or a work of art. The token, existing on the blockchain, represents ownership of these assets – some of which were previously hard to divide or trade and can now be easily managed and transacted.
“Solcon Capital is actively investing, particularly in the telecommunications and technology sectors. Tokenisation of real-world assets means you can tokenise spectrum, bonds, last-mile radio networks, or create fractional ownership – these are the new investment models that we are applying in the new digital infrastructure, in order to take a long-term approach in the way we build infrastructure,” explained Ngcaba.
“Our interest is buoyed by the evolving regulatory landscape, especially the Securities and Exchange Commission’s stance on ETFs [exchange-traded funds] in the US, which we believe could significantly impact the crypto industry and our investment strategies.”
While Solcon’s specific investment details remain confidential, due to ongoing discussions, the company is engaging with several innovative enterprises in this space, noted Ngcaba.
According to Investopedia, tokenisation of equity is expected to disrupt nearly every industry and sector. It is the creation of equity ownership units represented by digital tokens or ‘coins’.
Tokenised equity is emerging as a convenient way to raise capital in which a business issues shares in the form of digital assets, such as crypto coins or tokens, it says.
With the growing adoption of blockchain, businesses are finding it more convenient to adapt to the digitised crypto-version of equity shares, Ngcaba pointed out.
These tokens can be representations of traditional tangible assets, such as real estate, agricultural or mining commodities, analogue artworks, financial assets (equities, bonds), or non-tangible assets, such as digital art and other intellectual property.
New artistic direction
As part of Solcon Capital’s push into tokenisation, on 25 October the company introduced the Solcoin digital currency, to facilitate various transactions, especially within the evolving art sector, said Ngcaba.
“Our physical art space − Solcon Gallery in Johannesburg − is transitioning into the virtual realm, harnessing platforms like NFT [non-fungible token] marketplaces OpenSea and Patchwork Kingdoms.
“This move into digital art and NFTs reflects our commitment to technological advancements and aligns with our digital investment ethos. The virtual gallery aims to provide global access to African creativity, acting as a new avenue for art appreciation and investment.”
Tokenisation’s internet potential
Beyond NFTs, Solcon Capital envisions using tokenisation to increase internet connectivity across the globe. This can be made possible through the tokenisation of electromagnetic frequency spectrum.
Ngcaba explained tokenisation, when used in this space, could allow individuals, communities and small businesses to invest in and own a piece of the electromagnetic frequency spectrum, thus democratising access to spectrum.
He referenced his paper, titled Tokenisation of Electromagnetic Frequency Spectrum, published on LinkedIn, which unpacks how this could be done, and the benefits of tokenising the electromagnetic frequency spectrum.
“Through decentralised physical infrastructure networks (DePINs) and decentralised wireless network (DeWIs), tokenisation of electromagnetic frequency spectrum has the potential to enable new and innovative wireless networks to be made, to help connect the remaining three billion people who are still offline across the globe.”
DePINs and DeWIs have the potential to revolutionise the way we build and operate wireless networks, he added.
“Tokenising the spectrum would make trading spectrum easier and more efficient, and allow scope to be allocated more efficiently to those who need it most. Tokenising the spectrum would encourage new entrants to the wireless market and increase competition to drive down consumer connectivity prices.
“By tokenising the electromagnetic frequency spectrum and democratising access to it, we canenable new and innovative wireless networks to be made to help us connect billions of people globally.”
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