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SA fintech startup Wala may have been able to raise just four percent of the $30-million it aimed to net in an initial coin offering (ICO) that ended last week — but the head of the firm behind the raise, SA venture capital (VC) firm Newtown Partners, says it’s an “excellent result”.
Data provided by independent ICO database ICO Drops shows that the VC firm raised almost $1.2-million for a crowdfunding token sale of Dala, a new financial services utility token built on the Ethereum blockchain.
The ICO ran between 1 December to 11 December and a total of 1 billion tokens were issued of which 30% were available for the token sale.
While Wala CEO Tricia Martinez was not immediately available to comment, Newtown Partners managing partner Llew Claasen commented in an emailed response to questions from Ventureburn that the $1.2-million token sale is an “excellent” result for the first Dala token sale.
“We’ve already signed off on a 2018 budget to deploy this capital into key partnerships which will see Dala being adopted in South Africa and Uganda from Q1 2018. We expect to responsibly offer further Dala tokens for sale in future,” he said.
He stressed that the $30-million cap was not the minimum that Dala needed to sell in tokens to operationalise the Dala token economy in the short-term.
The token sale, he said. coincided with the biggest bitcoin bull run in history, so that the time value of not holding BTC (Bitcoin) was extremely high (he estimates it to be about five percent per day).
“The Dala token sale had registrations for participation in excess of $2-million, but these didn’t all convert into participation due to the high opportunity cost of not holding BTC,” he said.
He pointed out that a number of token sales that were down to take place during October and November either moved to 2018 or offered exceptionally deep discounts — of between 30% and 60% to pre-sale participants..
The VC firm raised almost $1.2-million for Wala’s Dala, a new financial services utility token built on the Ethereum blockchain
In the white paper (opens as a PDF) it issued for the ICO, Wala explains that the Dala token is a general-purpose utility crypto-token created to enable free banking and remittances for emerging market consumers.
The first application that will make use of Dala will be the Wala Financial Platform. Upon launch, the Dala token will have immediate utility within the Wala Financial Platform where a user can transfer Dala to other Wala users for free, remit across borders, and redeem Dala for airtime, data, and other value-added services.
The token will be used to reward “platform-enhancing behaviors” (such as the capturing of basic personal information, verifying using an OTP, taking a selfie, and capturing a fingerprint biometric profile that utilises the phone’s built-in camera) and will be redeemable for value-added services or exchangeable into fiat currency on the Wala Financial Platform.
The platform will allow someone for example to pay remittances which are more affordable than digital remittance services as no fee is attached for Wala. It will also allow users to buy things such as airtime using the Wala Market — for which they will be rewarded some Dala, which encourages them to return to the Wala platform. Users can also charge services to other users who can then use QR codes to pay for these services in Dala.
This is the third ICO that Newtown Partners has run in 2017. The others include one in June 2017 for Silicon Valley based SA entrepreneur Vinny Lingham’s company Civic which raised $33-million (read more here) and another to fund the Augmentors game, which allows those that play the game a chance to buy rare creatures using in-game currency.