NFTfi, a South African blockchain startup, has raised $5 million in a seed round to continue pioneering the financialization of NFTs. The round was headed by 1kx, with participation from Ashton Kutcher’s Sound Ventures, Maven 11, Scalar Capital, Kleiner Perkins, and others.
“Our main focus is that we want to do for NFTs what DeFi did for cryptocurrencies. As soon as you brought DeFi into cryptocurrencies, you also had this explosion of activity and liquidity in the market. And really, we want to act as that catalyst for the NFT market, unlocking some of the value in these NF T’s so they can then be ploughed back into the NFT community and market to help develop the space further,” said CEO Stephen Young.
NFTfi intends to use the new funding to expand its workforce, introduce new product features, expand the platform to other blockchains, invest in its community, and fund its decentralization.
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NFTfi completed its first loan in May 2020, and since then, over 1,500 transactions have occurred on the platform.
NFTfi, according to Young, has grown at an annual rate of 80% month over month in terms of loan volume, with a total value of more than $26.5 million. According to the company, lenders have earned more than $500,000 in interest.
A Look At What NFTfi Does
NFTfi is a marketplace where users can acquire a cryptocurrency loan on their NFTs and give loans to borrowers on their NFTs. It was founded by Stephen Young in February 2020. In other words, on the decentralized and peer-to-peer system, users can use their NFTs as collateral to borrow money from other users.
If a user comes to the platform to borrow $10,000, for example, many lenders will present the borrower with offers with differing interest rates and payment periods, from which the borrower can choose.
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Meanwhile, as part of the transaction, the borrower will be required to submit an NFT. When a transaction is completed, the NFT is moved to NFTfi’s smart contract (to which no one, including the NFTfi team, has access), and the borrower receives the funds.
The NFT is returned to the borrower’s wallet once the loan is repaid to the lender with interest. The lender receives the NFT if the loan is not repaid within the specified time frame.
Young was the co-founder and chief product officer at Coindirect, a cryptocurrency exchange and OTC desk, before founding NFTfi during the early phases of the COVID-19 pandemic as digital assets became more prevalent.
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Last year, he raised $890,000 in seed funding for NTFfi and put together a team in South Africa to construct and sell the product. According to Young, the majority of the group still lives in the African country, but the company is now established in the British Virgin Islands for compliance and regulatory reasons.
NFTfi blockchain NFTfi blockchain
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning write