Despite 2018 serving up market dips for both stocks and cryptocurrencies, blockchain startup MoxyOne has battled through and managed to raise over $1.5 million though a currently ongoing initial coin offering.
“We’ve had some of the worst luck,” laughs Tanshul Kumar, with he and his co-founder Mo Abbas coming from a background of stock market trading and watching sharp drops on some trading days earlier this year.
“There was the stock market crash, then the crypto market crash. A lot of our friends are surprised that we haven’t sold out yet.”
MoxyOne is Kumar and Abbas’ first large-scale startup, and pair are hoping to build the infrastructure behind a cryptocurrency debit card system aimed at both consumers and other crypto businesses.
MoxyOne’s end product is essentially a cryptocurrency debit card that can be used at any normal retailer, but the business has a white label aspect the founders hope will set it apart.
“There are so many different cryptos out there, and apart from trading them on exchanges, there’s not many ways you can make them usable. What we’re offering is for companies who have a token or who are about to do an ICO, they can use our debit card system as a way for customers to spend their token,” he says.
“That means they don’t have to hire a team to do it themselves, we have a whitelabel solution with debit cards the users can use.”
MoxyOne is hoping to raise a minimum of 4000 ether (Ethereum’s digital currency) through their token sale, which equates to around $3 million. The raise’s maximum amount is 24,000 ether, or about $18 million.
The company’s token sale is currently ongoing, and according to wallet tracking website Etherscan, the company had raised 1,132 ether, or $850,000 on Thursday. However, Kumar says they raised an additional 1000 ether during the pre-sale, bringing the total raise up to around $1.5 million.
But the market has not been kind to blockchain companies going through ICOs, as just two week ago, that amount of ether would have been worth $2.3 million. At the start of 2018, it would have been worth nearly $4 million.
Kumar is still upbeat, and says the first 24 hours of the company’s token sale, which opened yesterday, has been “crazy”.
“We’re halfway to the minimum to fund our project, and with one month to go that’s pretty damn good,” he says.
The startup has landed a few partnerships with fellow blockchain companies to start rolling out their debit cards post-launch, including gaming platform Flux, and local e-invoicing blockchain startup Invox Finance.
Hype a key factor to ICO success
With previous ICO success stories such as Power Ledger, CanYa, and Havven, a much talked about factor has been the number of investors excited about the project and the size of the company’s Telegram groups, an online chat platform commonly used by crypto companies to communicate with would-be investors.
Additionally, in the early days of token sales it would be common to see companies proudly spruiking the number of exchanges their token would be listed on after distribution. Today, this is almost never revealed until well after the ICO ends.
Kumar believes the need for “hype” is a harsh reality for blockchain companies, and one he says the MoxyOne team has “lived through”.
Unlike other startups who would pursue venture capital privately, revealing the amount raised only after everything is finalised, blockchain startups are almost required to promote themselves heavily to have any success with their raises.
The company’s advisors told the founders to do everything properly and professionally, not revealing what exchanges they have lined up and not hyping the project too much. However, Kumar also says it was important to get word out about the raise.
“It’s a really good project, but if no one knows about it they’re not going to invest,” he says.
The team then made a last-minute decision to run an ‘airdrop’ campaign, essentially giving away free tokens to anyone who could provide an email and wallet address.
“We didn’t want to run the campaign, but it got people talking about it and it did help raise ether once the ICO went live,” he says.
“Our advisors wanted us to do things properly which we have done, but we had to get some hype from the airdrop, otherwise no one would have known about us.”
“There’s so many projects out there you have to get yourself in front of people somehow before they even start to consider investing.”