Crypto Startup TokenPay Buys Equity Stake in Heidi Klum Lingerie Maker

Leigh Cuen
Mar 28, 2019 at 12:00 UTC
Updated Mar 28, 2019 at 15:20 UTC
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Cryptocurrency startup TokenPay is getting into the lingerie business.

Revealed in a filing Wednesday with the U.S. Securities and Exchange Commission, the Switzerland-based startup has spent $1.3 million for a 6 percent equity stake in Naked Brand Group (NAKD), the Australian lingerie company best known for supermodel Heidi Klum’s signature fashion lines.

TokenPay’s Derek Capo told CoinDesk the move is part of the startup’s broader diversification strategy following a December 2017 token sale that netted 2,000 bitcoin, or roughly $20 million. Spending token sale proceeds on equity investments has been a hedge against crypto market volatility, Capo said.

Still, it may take until 2020 or beyond for shoppers to buy Klum’s lingerie with TPay tokens. (We’ve reached out to NAKD for comment and will update if we hear back.)

Speaking of the startup’s investment in this lingerie company, Capo added:

“They [NAKD] also mentioned they are interested in working with a blockchain company for logistics. We’re interested in them accepting TokenPay’s merchant services platform so that they can accept crypto across all of their brands.”

Those merchant services would allow private purchases of negligee using TokenPay’s native token, TPAY, because the coin utilizes the Tor network to hide users’ IP addresses. Unlike most assets used in 2017 token sales, TPAY is not ethereum-based. Capo said 32,000 people participated in the 2017 sale by purchasing TPAY with bitcoin.

Equity deals

In the interview, Capo further detailed how TokenPay has spent its sale earnings so far – including nearly $4 million spent buying equity in Germany’s WEG Bank AG in mid-2018. In an arrangement initially brokered over Twitter, a 9.9 percent equity stake in the bank was donated to the Litecoin Foundation, while TokenPay kept the same amount of equity for itself.

Although there is no formal commitment to integrate TPAY or TokenPay merchant services, Capo hopes investing in companies like Naked Brand Group and WEG Bank AG will eventually facilitate both TPAY use cases and the infrastructure for that token’s adoption.

“We’re trying to get every single angle possible because we realize there are many opportunities in this industry,” Capo said. “Once you start using it [TPAY], then we’ll be able to offer you the opportunity to work with the German bank, open up a bank account there and convert your fiat if you choose.”

Other purchases with token sale earnings included a 10 percent stake in the privacy-coin-oriented mutual fund TokenSussie, a portfolio of crypto-related domain names and an undisclosed amount of equity in the Latin American blockchain company BlockSize, which is currently working on a decentralized exchange.

Plus, Capo said TokenPay also paid more than $50,000 for traditional exchange listings and donated $2.5 million worth of crypto to the Verge (XVG) community to incentivize the adult entertainment site Pornhub to accept XVG for porn subscriptions. Much like the bank equity donation to the Litecoin Foundation, this marketing strategy leverages outreach through crypto-adjacent communities that could promote TPAY in return.

In sum, over the past 15 months, the startup has spent more than half of the fiat value of its token sale. According to Capo, the startup retains roughly 10 percent of its bitcoin in a long-term treasury and has spent $1.5 million on operating costs such as salaries.

“We’ve built a lot of infrastructure and also a lot of deals,” Capo said. “Releasing the development of technology stuff takes time. So now you’ll start to see some of the products benefiting from the deals that we did earlier.”

Heidi Klum image via Shutterstock