STO stands for Security Token Offering. It is a tokensale that has tokens registered as securities.
Most ICOs sold utility tokens that only granted access to a service or blockchain with no expectation of appreciation or financial return. In contrast a STO has an express purpose of selling tokens that designed to give the investor or holder financial benefit.
Financial benefit may run the gamut from dividends, token burning to increase the price of the token to staking to earn passive income. In addition, tokens may represent ownership (partial or full) of a real world asset like gold, silver or real estate or shares of stock. Tokens may also represent a right to vote to determine the future of a company.
STOs are registered as securities in their host country and are subject to a stricter regulatory environment which should add more protection for investors but at the same time increase requirements for those wishing to participate in a STO.