NFTfi, a South African NFT collateral startup, has raised a $5 million seed round to continue pioneering the financialization of NFTs.
The investment was led by early-stage crypto fund 1kx led the round, with participation of Sound Ventures, Maven 11, Scalar Capital, Kleiner Perkins among other investors.
Founded by Stephen Young in 2020, NFTfi serves as a marketplace where users can get a cryptocurrency loan on their NFTs and offer loans to borrowers against their NFTs. In other words, users can use their NFTs as collateral to get loans from other users on the decentralized and peer-to-peer system.
The top NFT loans on NFTfi span across popular digital collectibles on the Ethereum blockchain — Art Blocks, Bored Ape Yacht Club, Cryptopunks, Autoglyphs, Meebits and VeeFriends. NFTfi transacted its first loan in May 2020, and since then, more than 1,500 have taken place on the platform.
The says that it has been growing at 80% month-on-month in terms of loan volume and the company has totalled more than $26.5 million in value. The company says lenders have earned over $500,000 in interest.
With the new cash infusion, NFTfi plans to grow its team, launch new product features, roll out the platform on other blockchains, invest in its community and fund its decentralization.
“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”, says Young.
