Ukrainian-Swiss startup Blocksport has raised $6 million in an initial coin offering, the company’s co-founder Volodymyr Liulka announced on Dec. 7.
Investors included Chinese digital asset manager FBG Capital, the Dubai-based venture fund NewTribe VC, Mexican crypto platform MEXC, and Australian investors LVT Capital, among others.
Initial coin offerings or ICOs are the process of crowdfunding with cryptocurrency - a company sells tokens instead of shares. They are considered to be very risky and speculative investments.
Blocksport’s BSPT token grants holders the ability to purchase other Non-Fungible Tokens (NFTs) – unique digital items such as cards with the images of athletes. BSPT holders can use Blocksport’s platform to buy and sell NFTs, as well as earn some for free by just using the platform. Users can keep 90% of their profits, and a 10% commission goes to the company.
With the money raised at the offering, Blocksport plans to expand globally and hire tech specialists to strengthen their research and development center in Ukraine. By the end of this year, Blocksport plans to raise another $500,000 via ICO to accomplish these goals. It wants to eventually issue 1 billion BSPT tokens.
Founded in 2019, Blocksport has already attracted $1.2 million from traditional venture investors prior to raising $6 million in the recent ICO.
Blocksport’s primary business is helping develop mobile apps for athletes to find sponsors, sell merch or keep tabs on fans.
But the company has also set its sights on the buzzy and lucrative market for NFTs. Each NFT is a distinct digital item with a unique blockchain signature, like a sports card.
NFT can be an additional source of revenue for professional teams, which may not know how to work with the technology, according to Liulka.
Self-promotion through NFTs is especially popular among esports athletes — Blocksport works with them as well. As of December, Blocksport counts 14 esports businesses and 12 traditional sports teams among its clients, including Ukraine’s most famous football club Dynamo Kyiv, Serbian rugby club Red Star, and cycling league in Belgium.
NFTs are a risky investment because the global crypto market lacks regulation. In Ukraine, for example, President Volodymyr Zelensky vetoed a bill legalizing cryptocurrency in October because Ukraine doesn’t have money to finance a new cryptocurrency regulator.
For Liulka it should be less of a problem because his company is headquartered in Zug, also known as Switzerland’s "Crypto Valley" for having some of the best legislation for cryptocurrency users.