UK’s Smarter Web Company Issues First Bitcoin-Denominated Convertible Bond Worth $21M

The Smarter Web Company raised $21 million through the UK’s first Bitcoin-denominated convertible bond from TOBAM.

The London-listed technology firm announced Tuesday that the Paris-based asset management company, which has maintained Bitcoin exposure since 2016, fully subscribed to the “Smarter Convert” instrument through three managed funds.

The Smarter Web Company (#SWC $TSWCF $3M8.F) RNS Announcement: Smarter Convert – $21 Million Subscription.

The Smarter Web Company is pleased to announce the launch of Smarter Convert, a strategic, interest free capital-raising initiative structured as a convertible bond,…

— The Smarter Web Company (@smarterwebuk) August 6, 2025

Unlike traditional convertible bonds, this structure denominates the principal repayment amount in Bitcoin while keeping the conversion share price fixed at £2.05, representing a 5% premium to Monday’s closing price of £1.95 per share.

Revolutionary Bond Structure Offers Bitcoin Upside with Downside Protection

The convertible bond includes several unique mechanisms designed to protect both issuer and investor interests in volatile market conditions over its 12-month term.

After an initial six-month period, Smarter Web can force conversion to equity if shares trade 50% above the conversion price for ten consecutive trading days, effectively capping the company’s Bitcoin exposure risk.

Conversely, if bondholders opt against conversion at maturity, the company will repay 98% of the bond’s Bitcoin-adjusted value and retain 2% to offset transaction costs.

This Bitcoin denomination means repayment amounts will fluctuate with cryptocurrency prices rising if Bitcoin appreciates and falling if it declines, while conversion terms remain denominated in British pounds.

If all bonds convert to equity, approximately 7.7 million new shares would be issued, calculated by dividing the $21 million at current exchange rates by the £2.05 conversion price.

TOBAM CEO Yves Choueifaty described the structure as offering “prudent downside protection, premium equity participation, and a Bitcoin-denominated structure that reflects our conviction in Bitcoin as the next cornerstone of trust.”

Similarly, Smarter Web CEO Andrew Webley positioned the offering as expanding funding options, stating the deal “marks yet another first for the UK capital markets” and expressing confidence it will “open up a new segment of capital for the Company.”

Corporate Bitcoin Financing Evolves Beyond Pure Equity Dilution Models

This convertible bond structure is yet a potential evolution in how Bitcoin-focused companies access capital markets, moving beyond the pure equity dilution model popularized by MicroStrategy.

The new approach offers a middle path between traditional debt and equity financing, potentially addressing concerns raised by analysts about excessive shareholder dilution in the corporate Bitcoin treasury space.

Smarter Web’s aggressive Bitcoin accumulation strategy has generated remarkable returns, with the company achieving a 49,198% year-to-date BTC yield through multiple purchases throughout 2025, including 325 Bitcoin in July and 196.8 Bitcoin in June.

🚀 Smarter Web Company crosses 2,000 Bitcoin mark after $27 million purchase reaching top 25 global corporate rankings with 49,198% YTD yield.#Bitcoin #Treasuryhttps://t.co/cDM2etAMnF

— Cryptonews.com (@cryptonews) July 30, 2025

The company has invested £166.8 million total at an average price of £81,346 per coin, positioning itself among the top 25 global corporate Bitcoin holders with approximately £500,000 in remaining treasury cash for future deployments.

However, this aggressive strategy has driven significant stock volatility, with shares falling 15% after recent fundraising despite being up 274% year-to-date.

Meanwhile, Japanese Bitcoin investment firm Metaplanet recently filed to raise $3.6 billion through preferred stock offerings, demonstrating continued appetite for innovative financing structures in the sector.

The broader corporate Bitcoin treasury movement has seen over 283 companies accumulate 3.64 million Bitcoin collectively, though some industry observers question the sustainability of current strategies.

In fact, Galaxy Digital’s Michael Novogratz recently suggested the market may have reached “peak treasury company issuance,” shifting focus to which existing players will achieve meaningful scale.

Even earlier this year, VanEck’s Matthew Sigel warned that companies issuing shares near their Bitcoin net asset value risk creating “erosion” rather than capital formation.