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A Richmond company that offers a multiperson exchange marketplace for non-fungible tokens has raised $202,500 in a pre-seed round, according to a filing with the Securities and Exchange Commission. NeoSwap founder and CEO John Ennis said the company has raised more than the publicly available amount. He declined to give an exact figure.
“We have had to keep adjusting, because the market conditions are so turbulent right now,” Ennis said. “Our original plan was to do $500,000 pre-seed and do $3 million seed, but then in the early summer, the crypto market was volatile. It was a very tough fundraising environment.”
According to the filing, the company wants to raise $900,000, but Ennis said the final amount will be higher. The fundraising round requires a minimum of $10,000 to invest in the company. Ennis expects to complete the entire funding round in the next few weeks. His goal with the pre-seed round is “to get two years of runway, but a lot of this is in flux.”
Ennis said NFTs and blockchain are amazing technology because they allow for the differentiation of objects. He used the example of a car. Two cars of the same make and model might look the same, but they are different objects. Each has a different value.
“Most things in the real world are non-fungible,” Ennis said. “They are very similar, but they are not the same. NFTs bring the idea of non-fungibility, which is what we are used to in the physical world, into the digital world. That is going to be the link to experience life like we are more used to in the digital space.”
NeoSwap is based on something that happened at his house at Christmas. His family would be given gifts at random. After all the gifts were unwrapped, everyone in the family could exchange the gifts they had opened for a gift they wanted. NeoSwap allows multiple people to be involved in an exchange of NFTs. He said as many as 20 people have been involved in a single exchange.
“What we do at NeoSwap is we help people come together in groups and reassign ownership of NFTs and currency,” Ennis said. “It’s commerce.”
He said the exact model of how NeoSwap makes money in the exchange process is still being worked out. One thought is to collect a portion of the funds when currency is involved. The other idea is for a monthly subscription.
NeoSwap was founded in March. It was spun off from Ennis’ other company, Aigora, where Ennis worked as the founder and president from 2019 to 2022. When NeoSwap was founded, several other employees left the AI firm and went to work at NeoSwap.
Ennis, who has a doctorate in mathematics, said the decision was made to spin off the company after NeoSwap participated in an accelerator program sponsored by the blockchain company Stack. He is the only Richmond-based employee. One other founder is in Poland and the other is in Spain. The company also has employees in Florida, New York and Texas.
Money from the funding round will be used to pay current employees as well as hire new employees.
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