Tokenization Startup Theo Launches Beta Platform for Institutional RWAs

Tokenization platform Theo went live with its beta service Monday, marking another entry in the growing market for bringing traditional financial assets onchain. With its core product thBill, an institutional-grade tokenized money market product built to serve onchain ecosystems, the New York startup is targeting what it sees as a critical problem: tokenized funds struggling to attract sufficient trading volume despite institutional backing.

The platform's first client is ULTRA, a Singapore-based token-native fixed income fund managed by Wellington Management through FundBridge Capital and enabled by Libeara's technology stack, according to an announcement on Tuesday. The collaboration represents a test case for whether institutional-grade infrastructure can solve the liquidity challenges that have plagued many tokenized investment products.

Theo's approach differs from other tokenization platforms by bundling token issuance with continuous market-making services. The company argues this addresses a key weakness in the current market, where funds can successfully tokenize but fail to generate the trading activity needed for investor confidence.

The timing coincides with increased institutional interest in tokenized assets, though adoption has been slower than many proponents initially expected. Traditional asset managers have been cautious about moving strategies onchain due to concerns about liquidity, regulatory compliance, and operational complexity.

Wellington Management's participation signals continued institutional experimentation with blockchain technology, though the asset manager is working through partners rather than launching tokenized products directly.

The collaboration with Libeara, which is backed by Standard Chartered's venture arm, adds traditional banking infrastructure to the partnership. This combination of crypto-native technology and established financial services may prove crucial for institutional adoption.

The beta launch comes as the tokenized asset sector faces scrutiny over whether onchain versions of traditional products can deliver meaningful advantages over conventional alternatives. Success will likely depend on whether Theo can demonstrate sustained trading volumes and investor adoption beyond the initial partnership.

Theo raised $20 million in April from investors including Hack VC and Anthos Capital, with backing from traders at established firms like Citadel and Jane Street. The founding team's high-frequency trading background at Optiver and IMC Trading reflects the company's focus on market structure and liquidity provision.