The Smarter Web Company (AQSE:SWC) has launched an unconventional, Bitcoin-denominated convertible bond that’s already raised $21 million (£15.8 million) in a fully subscribed round backed by Paris-based asset manager TOBAM.
The new instrument, dubbed Smarter Convert, was designed in collaboration with TOBAM, which invested through three of its managed funds.
The deal is structured to offer downside protection for investors while giving the company the opportunity to raise capital at a premium, without incurring interest or immediate dilution.
At the heart of the structure is a 12-month bond denominated in Bitcoin, but convertible into shares of Smarter Web Company at a 5% premium to its 5 August closing price of £1.95.
That sets the conversion price at roughly £2.05 per share, equivalent to around $2.73 using a reference exchange rate of 1.3288 GBP/USD.
If all bonds convert, Smarter Web Company will issue just over 7.7 million new shares.
TOBAM, an early institutional participant in the digital asset space and long-time advocate of Bitcoin’s diversification potential, has been active in crypto markets since 2016.
Its backing lends credibility to a structure that blends traditional convertible mechanics with digital asset exposure.
The bond gives investors the option to convert into equity after a six-month lock-up.
If the share price rises by 50% above the conversion price for 10 consecutive trading days, the company can force conversion.
If no conversion occurs after 12 months, Smarter Web Company will repay 98% of the bond’s principal, adjusted to reflect the prevailing Bitcoin price at the time.
Because the bond is priced in Bitcoin, repayment amounts rise or fall in line with the cryptocurrency's value.
This exposes both parties to Bitcoin price movements, a risk the company has mitigated by capping the total amount of Bitcoin acquired through this programme at 30% of its unencumbered treasury holdings.
The initiative allows Smarter Web Company to raise funds above market without immediately diluting shareholders, while growing its crypto reserves in a measured way.
According to the company, this approach could result in about 5% less dilution than a typical equity raise under similar terms.
Two scenarios illustrate how the structure could play out.
In the downside case, investors opt out of conversion and request 98% repayment, with the company retaining the 2% balance.
In the upside case, the share price rises significantly, enabling conversion, or even forced conversion, locking in capital at a premium to the original share price.
Smarter Web Company hinted that more such bonds could be issued in future, potentially again with TOBAM or other investors, as the firm continues to experiment with alternative capital-raising tools that leverage blockchain-era flexibility.
The funding update comes just over a week after SMC raised around £20 million from a share subscription programme.