SA’s Ekasi Bucks ICO falls short of R50m target, nets just R500 000

South African blockchain consultancy Ekasi Bucks has fallen far short of an ambitious target to raise R50-million in an initial coin offering (ICO) to fund a Blockchain-based rewards programme for township residents that buy from certain affiliated township businesses.

Ekasi Bucks’ ICO, which kicked off on 25 September, came to an end yesterday. The platform raised just R500 000, the site’s co-founder Lucky Kgwadi said today.

He however said most of the R500 000 — which had come from US — was returned to investors. The platform has retained only about R100 000, netted from non-US citizens — including investors from India. The R100 000 has none the less allowed the startup to cover some development costs for the Blockchain-enabled system, he said.

While the startup made available bank account details registered in the name of Ekasi Bucks into which local investors could make payment in exchange for tokens — none did so. Kgwadi surmised that local investors stayed away from the ICO because they are “not familiar with what is an ICO”.

It is best to get your connections right and to get ICO advisors, which we have now, says Ekasi-bucks co-founder

In its white paper (opens as a PDF) for the ICO which kicked off on 25 September, the startup states that Ekasi Bucks administrates and monitors customer-merchant settlements on a bitcoin based point-of-sale system.

Customers will be able to register for a mobile wallet which will be linked to a prepaid card. They will then be able to pay for goods by getting merchants to scan QR codes either with their cellphone or any 3D or 2D scanner.

The startup was launched last year by Kgwadi and Edgar Lebelo, and their rewards programme is already active across the country with over 4000 merchants and 20 000 card users.

Kgwadi said the startup is in talks with a major bank which is keen to acquire the company, but added that he could not reveal the name of the bank at this stage.

The startup is also working with the Reserve Bank to trial its rewards programme, he said.

What then has he learnt from the failed ICO?

“It is best to get your connections right and to get ICO advisors, which we have now,” said Kgwadi. “Most important is that you need to do you PR right,” he added. The startup is also developing a new website, which he expects will go live in January 2018.