UK’s Bitcoin denominated bonds hit new milestone with Smarter Web deal, raises $21M

The Smarter Web Company, a publicly traded UK-based firm known for holding Bitcoin on its balance sheet, has successfully raised $21 million through Bitcoin denominated bonds, marking a first-of-its-kind move in British capital markets.

In an official filing with the London Stock Exchange on Wednesday, the company announced the launch of a Bitcoin denominated bond round dubbed “Smarter Convert” which raised 15.8 million British pounds ($21 million). The fully subscribed issuance was backed by French asset management heavyweight Tobam.

A Strategic Partnership with Tobam

The “Smarter Convert” product was developed in partnership with Tobam, which invested through three of its managed funds. Tobam CEO Yves Choueifaty emphasized the firm’s long-term crypto strategy, saying: “Our investment is driven by a commitment to long-term alignment.”

Tobam, which managed over $2 billion in assets as of late 2024, was among the first to create a Bitcoin mutual fund for institutional investors back in 2017. Its renewed involvement through Bitcoin denominated bonds underlines growing institutional confidence in crypto-native financial instruments.

First-of-Its-Kind in UK Markets

Smarter Web Company CEO Andrew Webley called the Bitcoin denominated bond structure “a first for the UK capital markets,” and a move that could unlock new capital channels for the company.

“We believe this 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 one of the largest publicly listed companies in the UK,” Webley stated.

The Bitcoin denominated bonds are 12-month convertible instruments priced in BTC. Investors can convert them into company shares at a 5% premium over the firm’s Tuesday trading price of $2.60, bringing the conversion price to approximately $2.73.

If all bonds convert, over 7.7 million new shares would be issued. However, if the share price rises 50% above the conversion rate for 10 consecutive trading days, the company can force a “diversion” a mandatory conversion to equity. Otherwise, 98% of the bond’s value is repaid in Bitcoin at maturity, adjusted to the BTC price at that time.

Fundraising Without Dilution

By issuing Bitcoin denominated bonds Smarter Web Company raises capital without immediately diluting shareholder equity while also increasing its exposure to Bitcoin.

“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,” the company stated.

This announcement comes after the firm added 225 BTC to its treasury in late July. According to BitcoinTreasuries.NET the company now holds 2,050 BTC, worth approximately $234 million.

Bitcoin Denominated Bonds: A New Trend?

The innovative structure of Bitcoin denominated bonds could set a precedent for other firms looking to raise capital without relying on fiat-based instruments. With institutional players like Tobam backing the model, the concept could gain broader acceptance in both crypto and traditional finance sectors.

Whether Bitcoin denominated bonds become a mainstream fundraising vehicle remains to be seen, but the Smarter Web Company’s successful raise signals that the market may be ready for this hybrid approach to capital raising.