Fundings and new wave in the cryptocurrency space, NFTs (Non-Fungible Tokens)

Good morning and welcome to Q2 of 2021🥳! This week completed the first quarter of what has been a good ride for the startup space in Nigeria. The ecosystem has witnessed a lot of deals and exciting news that have placed the continent on the global map. Last month, we discussed open banking and other updates in the Nigeria startup ecosystem. What do we have for you in this edition?

In today's newsletter, it’s raining growth and funding rounds. We will be reviewing some of the important updates of the startup ecosystem in March and our regulatory deep dive section is about the new wave in the cryptocurrency space, NFTs (Non-Fungible Tokens).

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Updates in The Startup Ecosystem

​Flutterwave attained unicorn status 🦄

On the 10th of March, Flutterwave announced that it raised a $170 million Series C funding round. The raise valued Flutterwave at over $1 billion and makes the company Nigeria’s third unicorn after Interswitch and Jumia.

Kuda Bank raised $25 million in a Series A led by Valar Ventures

Nigerian fintech startup, Kuda Bank raised $25 million in a Series A round led by Valar Ventures, the firm co-founded and backed by PayPal's co-founder, Peter Thiel. The Series A follows Kuda’s $10million raise in November 2020, a feat cheered for being the largest seed round by an African startup.

Paystack’s acquirer, Stripe raised $600 million

Stripe became a known name to many Africans after acquiring Paystack, a Nigerian payment startup, last year. Stripe's $600 million series H funding round valued the company at $95 billion making it the third biggest privately owned tech company in the world.

​Bankly, a Nigerian fintech startup secured a $2m seed funding round

The round was led by co-investors including African payments unicorn, Flutterwave and Vault. This is one of the highest seed rounds raised by a woman-led startup in Africa.

Bolt is launching a food delivery service

Bolt, the popular ride-hailing company, is expanding its business model in Nigeria to include food delivery.

BONUS: Meet the 10 African Startups Selected for Y Combinator 2021 Cohort (YC W21)

One of our clients, Sendbox, a logistics company founded by Emotu Balogun and Olusegun Afolahan in 2016 to solve the problem of logistics for small and medium businesses by providing them with affordable and reliable courier services to fulfil local and international shipping from pickup to doorstep delivery, got accepted into YC Winter 2021 cohort. Whoop Whoop!!!

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Let’s take a deep dive into the new wave in the cryptocurrency space, NFTs (Non-Fungible Tokens).

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DEEP DIVE: Non-Fungible Tokens (NFTs)

Few weeks ago, a Nigerian digital artist sold NFTs for 9 ETH and 13.2 ETH. Why is this important you may ask? We will get to that shortly. However, let us start with what NFTs are.

When something is said to be “non-fungible” it means that that thing is unique and can not be replaced with something else. For example, a naira note is fungible in that you can barely identify the difference between two naira notes, and you’ll have the same thing. NFTs can really be anything digital that represents a wide range of tangible and intangible items (such as drawings, music, virtual sports cards, real estate, etc.). Unlike regular cryptocurrencies, NFTs cannot be directly exchanged with one another. This is because there are no NFTs that are identical – each non-fungible token has its specific information and it is impossible to exchange it with another.

The key difference between NFTs and cryptocurrencies is that currencies allow fungible trade, which means that bitcoins can be exchanged for another and they are identical. While NFTs are designed to uniquely restrict and represent a unique claim on an asset. NFTs are coded with smart contracts that govern the verification of ownership and manage the transferability of the NFTs.

The wave of Non-Fungible Tokens (NFTs) raises legal questions that concern digital ownership, intellectual property, royalty collection and regulatory issues in the digital ecosystem. NFTs are protected by smart contracts and through a minting process that assigns a unique identity to the digital asset and creates a contract that cannot be changed by anyone. This process protects the intellectual property of the owner and prevents the ownership to be claimed by someone else unless granted to another party.

NFTs are becoming so popular, but it’s unclear how they fit into the existing legal and regulatory frameworks that govern the financial, technology and cryptocurrency industries in Africa and Nigeria because cryptocurrency transactions in Nigeria have been stifled by regulations.

Don’t forget to follow us on our social media channels - Linkedin, Instagram, and Twitter, we are starting a new series about the legal needs at every step of a startup’s journey and stage of growth!