Since inception, our investment playbook at LiveOak has been consistent: back Texas-based domain-rich founders tackling large, often complex, and underserved markets, typically in their first institutional round. RDC fits that description. The three founders, Ankit Mehta, Bryant Kim, and Ishaan Narain, spent the better part of a decade running Citi’s Depositary Receipts franchise, which enabled the listing of ADR securities on NYSE for global companies such as Alibaba and others. They are now applying that expertise to provide the infrastructure rails to connect a broad array of commodities, including digital assets, to traditional financial markets. Our early investment in Eventus, a trade surveillance platform, gave us an appreciation for the convergence between traditional financial markets and emerging asset classes, including digital assets, and a conviction that the infrastructure connecting them remained largely unbuilt.
The depth of knowledge matters here more than in most investments. Depositary receipts require a nuanced understanding of the relationships between issuers, custodians, transfer agents, and settlement systems. When we met this team, their intricate command of the space was immediately evident. They understood not just how the machinery works, but where it breaks down, and why nobody has successfully pointed it at the exploding growth of modern assets.
For nearly a century, DRs have served as the trusted, regulated plumbing enabling US-based capital institutions to access foreign assets through US securities. Digital and alternative assets, despite having grown into a multi-trillion dollar asset class, remain largely disconnected from that same infrastructure. Spot crypto ETFs were an important step to provide passive exposure for institutions to digital assets through traditional securities. But these ETFs keep investors one step removed, since they own shares in the fund rather than the actual asset itself. In contrast, by expanding the depositary receipt structure to digital assets, RDC gives investors direct ownership of underlying digital assets through a security that also clears and settles through rails they already use.
The breadth of applications is one of the things that gave us even greater conviction. On the digital side, the platform already supports Bitcoin, Ethereum, Solana, and XRP. Holders get direct ownership of the underlying token rather than passive fund exposure, with conversion that is in-kind and same-day with no taxable event. That provides significant advantages for ’40 Act funds, which must hold securities rather than commodities. Receipts also allow prime brokers to margin positions as standard equity inside a diversified portfolio, which is a meaningful advantage for hedge funds sitting on idle crypto. Beyond digital assets, RDC is already building receipts rails for other commodities that have never had a direct ownership vehicle in traditional capital markets. By leveraging the DR rails and associated regulatory frameworks, RDC materially expands access to digital assets and other commodities to a broader swathe of investors.
Throughout our diligence, what struck us was how consistently seasoned market participants arrived at the same conclusion independently – that RDC’s structure is the most elegant and efficient way to bring these assets into institutional portfolios. The co-investors who joined us in this round reflect that same conviction, which includes OTC Markets, Hivemind Capital, GTS, and others. They bring trading relationships, regulatory depth, and distribution that strengthen RDC beyond the capital itself.
We are proud to have led RDC’s $7M oversubscribed round and are glad to support the company as it builds out this category.
