Initial Coin Offering (ICO)

Last updated on
February 17, 2022

Initial Coin Offering is a type of capital raising activity in the blockchain finance industry that leverages the decentralized systems of blockchain technology to raise capital in the form of cryptocurrencies in ways that align the interests of various stakeholders.

Initial Coin Offering is conventionally seen as cryptocurrencies’ version of Initial Public Offerings for raising capital to fund projects. There are distinct differences between ICOs and IPOs though. For ICOs, Investors can participate in an initial coin offering in exchange for a new cryptocurrency token issued by the blockchain startup. This token may have some utility related to the startup’s product or service, or it may simply represent a stake in the company or project. IPOs are mostly pathways used by growth-level companies and corporations instead of startups. Another distinct difference is that ICOs are largely unregulated, unlike IPOs.

Nigerian Context

In 2018, Nigeria’s non-cash remittance ecosystem startup SureRemit raised $7 million in Initial Coin Offering making it the first ICO in West Africa and Nigeria ever and one of the highest ten public raises for Nigerian startups that year.

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