Money can move into tokenized private funds much faster than it comes out. Even as asset managers use blockchain technology to turn fund shares into digital tokens, a lack of liquidity can mean investors must wait months to find a buyer. Fission, a New York-based startup, is building a system designed to let investors skip that wait and sell their tokenized fund shares in seconds.
On Thursday, the startup, founded in 2024 by CEO Jonathan Shaffer, CRO Steve Bendit, and CTO Chris Humphrey, announced a $10 million Series A to address the liquidity problem. Pantera Capital led the round, which closed in September, with participation from Circle Ventures, Borderless Capital, and Ari Rubenstein. Fission declined to disclose its valuation.
Although tokenization has helped investors skip cumbersome paperwork to invest in funds from major managers such as BlackRock, Apollo or Janus Henderson, it doesn’t guarantee that they will find buyers when they want to sell their holdings. Fission’s approach is to act as the buyer, allowing investors to sell through its platform rather than wait for the fund to process a withdrawal. Investors connect their digital wallets and submit a sale, while Fission handles the legal and trading mechanics behind the scenes.
“It would take you normally about 200 days to sell [a] product. For a fee, you can sell it right now and get your money back, and this will settle… in 90 seconds or less,” Shaffer told Fortune.
The missing exit
Tokenization has gained traction on Wall Street as asset managers put fund shares and investment products on digital ledgers. BlackRock expanded its lineup in August with two tokenized money market products, while JPMorgan’s asset management arm has also stepped up its efforts, launching its second tokenized money market fund for U.S. investors in May.
This recent push also extends to brokerage distribution: Pittsburgh-based investment manager Federated Hermes announced a partnership with Prometheum this month to offer tokenized funds through brokerages, with the first product expected in early 2027.
But liquidity issues remain. In June, InvestaX, a platform for digital investments, said investors in tokenized private-credit products mostly put money in or withdrew it through the funds, instead of selling their holdings to other buyers. An earlier report by the International Organization of Securities Commissions, a global group of financial regulators, found that firms had made more progress creating digital tokens than establishing markets where investors could sell them to one another.
“Where tokenization is today has really been focused around the bridging layer and the issuance layer… but what Fission is focused on—the post-tokenization problem—almost nobody is focused on,” Franklin Bi, general partner at Pantera Capital, told Fortune.
Fission’s founders encountered the problem firsthand. As an investor at Point72, the hedge fund of billionaire Steve Cohen, Shaffer watched Wall Street turn private fund shares into digital tokens without shortening investors’ waits to cash out. As he dug into the mechanics, he connected with Bendit, then head of business development at Securitize, a company that puts financial assets on blockchains. After more than two years discussing why fund liquidity remained elusive, they teamed up with Humphrey to launch Fission and build a faster exit for investors.
Today, the startup has eight employees, with team members on Long Island and in Los Angeles. Most of its customers are institutional investors or organizations that hold assets on blockchains, Shaffer said. They include U.S. and overseas hedge funds with tokenized private-credit or equity holdings, crypto organizations managing their treasuries, and stablecoin issuers that keep reserves in tokenized investments that earn interest. A smaller but growing group of wealthy individuals also uses the platform to cash out personal holdings.
The Series A follows a $1.6 million pre-seed round led by SALT Fund and Kraynos Capital. Existing investors New Form, gumi Cryptos Capital, Anthony Scaramucci, Manhattan Venture Partners, Reflexive Capital, and Lattice Capital also continued their backing.