An NFT company that lets users take out loans on their collections, NiftyApes has raised $4.2 million in seed funding.
The firm is joining a growing group of debt financiers focused on NFTs that are receiving interest from venture capitalists.
The round was led by Variant and FinTech Collective and others participants include Robot Ventures, Polygon, Coinbase Ventures, The LAO, FlamingoDAO, Ryan Sean Adams, David Hoffman, Eric Conner, Anthony Sassano, Cyrus Younessi, DC Investor, James Young, James Duncan, Nadav Hollander and Brendan Forster.
Allocating The Fund
The funds will be used by NiftyApes to grow its team and expand the firm, its founders Zach Herring and Kevin Seagraves said to The Block.
The NiftyApes initiative aims to enhance secondary debt markets for NFTs, shifting the economy away from predatory lending practices favouring the wealthy in web2 setting.
In order to accomplish this, NiftyApes intends to facilitate market competition for automatically refinancing NFT loans.
“TODAY IS THE DAY. A year ago, #NiftyApes began with questions about inequalities in lending and borrowing. Today, our $4.2M seed round led by @variantfund and @fintech_io begins to answer those questions,” tweeted NiftyApes.
One Twitter user said, “New lending protocol is live. Key innovation is that lender side comes first and makes a collection-wide offer for borrowers to accept, so you always have some borrowing power for blue chips 🔥👏.”
New lending protocol is live. Key innnovation is that lender side comes first and makes a collection-wide offer for borrowers to accept, so you always have some borrowing power for blue chips 🔥👏 https://t.co/eBUJcQVJyW
— Alex Salnikov 🟡 Rarible📍Devcon🇨🇴 (@insider0x) November 1, 2022
Another NFT-focused Debt Financing Company
On Oct. 13 MetaStreet raised $10 million with OpenSea and Dragonfly Capital and became another NFT debt financing company to receive funding.
“Today, we’re excited to announce our latest $10M funding round, along with the closed beta of 💪 🧹PowerSweep 💪🧹, a first of its kind NFT leverage trading platform built in partnership with @reservoir0x,” said MetaStreet.
1/ 💪+ 🧹 = ✨
Today, we’re excited to announce our latest $10M funding round, along with the closed beta of 💪 🧹PowerSweep 💪🧹, a first of its kind NFT leverage trading platform built in partnership with @reservoir0x pic.twitter.com/BXZiMEKtgN
— MetaStreet (@metastreetxyz) October 13, 2022
The bear market has reduced the value of NFT floor prices, but so-called blue-chip NFTs, which are popular NFT projects, remain highly valuable, making them a good collateral asset for debt.