Ondo’s New Tokenized Notes Tie Payouts to an Unnamed Pre-IPO AI Company

Ondo Finance is extending its tokenization business from public stocks and Treasuries to companies that have not yet listed. The firm announced Ondo Private Markets on Tuesday, a product offering tokenized notes that track the value of individual private companies.

The first market references an unnamed pre-IPO AI company and is expected to begin secondary trading this week. Ondo said robotics, cybersecurity, biotech and infrastructure names will follow, and a company blog post also lists defense, energy and space. The product is open only to eligible investors outside the U.S., in jurisdictions where it is permitted.

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Payouts depend on what the referenced company’s common stock is worth per share when a “qualifying liquidity event” occurs, according to Ondo. Buyers do not get stock. The notes are obligations of their issuer and come with no ownership or shareholder rights in the underlying company, the release states.

Holders can keep the tokens in self-custody wallets, send them to other eligible holders, trade them around the clock on secondary markets or deploy them in DeFi. Ondo said that tradability targets a long-standing problem in private markets, where investors can wait years for an IPO before they are able to sell.

“In the US, the majority of the investment options accessible for retail are public companies, yet 87% of companies with over $100m in revenue are private. That’s where many of the leaders defining the next era of our economy are emerging, and retail investors can’t access them today,” Ian De Bode, Ondo’s acting CEO and president, said in the release. “Ondo Private Markets is built to change that, bringing tokenized exposure to the world’s best companies with 24/7 trading on permissionless rails.”

Ondo said the infrastructure behind its tokenized stocks and Treasuries holds $3.7 billion in total value locked across more than 1 million cumulative holders.

The new notes work differently from the tokenized BlackRock ETF and Micron shares Ondo brought onchain in July inside the U.S. regulatory perimeter. Those tokens are backed one-for-one by custodied securities and give holders proxy voting rights.

Coinbase has offered pre-IPO exposure through a different instrument, derivatives. It listed SpaceX pre-IPO perpetual futures on its international exchange in June, also limited to users outside the U.S.

Ondo has not said which AI company the first notes reference or which trading venues will list them.

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