NFT Investments, an investment vehicle specialising in non-fungible tokens (NFTs), has announced a £35m ($48m) listing on the Aquis Stock Exchange Growth Market in London.
The company is one of the first NFT stocks to list in the City and the amount raised is a fresh record for the Aquis market.
The company planned to raise approximately £10m before expenses but the share placing was “substantially oversubscribed”. NFT investments reported an order book of demand in excess of £100m.
The hot listing comes amid an explosion of interest in NFTs, which most people had not heard of until a few months ago. Fans say the technology could be the future of collectible markets like fine art. Critics say the technology is just a fad with little to back it up.
An NFT is a unique, one-of-a-kind crypto asset that enables collectors to authenticate, own and trade original authenticated versions of specific digital goods on the blockchain. NFTs can be anything digital from drawings and paintings to music.
Twitter (TWTR) founder Jack Dorsey recently auctioned his first ever tweet as an NFT, with all proceeds going to charity. The tweet sold for $2.9m last month.
When an NFT is bought, the person purchasing it receives a certificate secured by blockchain technology that certifies them as the owner of that specific digital asset.
In economics, a fungible asset is something with units that can be readily interchanged, like money. Iff something is non-fungible, it has unique properties that mean it cannot be interchanged.
NFTs cannot be replicated or substituted and can only have one owner at any given time. NFTs are transparent and no one is able to modify the record of ownership or create a replica NFT.
According to a study from NonFungible, the total value of NFT transactions quadrupled to approximately £178m last year. The number of digital wallets trading them doubled to over 222,179, the report said.
The market exploded into the mainstream last month after an NFT of a digital artwork created by an artist named Beeple was sold for $69m by auction house Christie's. The sale put him “among the top three most valuable living artists” in the world, according to the auction house.
Friday's flotation makes NFT Investments the first-ever publicly listed company focused exclusively on investing in NFTs.
NFT Investments was established to invest in NFTs directly and in companies or funds that have exposure to NFTs and blockchain technology.
NFT said the proceeds of its initial public offering (IPO) will be used to “identify and carry out due diligence on potential investments” and to provide working capital.
The company was worth approximately £50m on debut — double the valuation it had sought at the start of the month. Shares in the company were trading at around 8p, a 60% increase on its IPO price of 5p per share.
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“NFT Investments' admission to the AQSE Growth Market marks a significant milestone for the non-fungible sector,” Jonathan Bixby, Executive Chairman of NFT Investments, said.
“Our record-breaking raise on AQSE provides a strong foundation on which the company can execute its long-term growth strategy and capitalise on its first-mover advantage.
“We are delighted with the strong support we have received from a wide range of investors and our oversubscribed placing is a real endorsement of our investment plans in a promising market set for growth ."
Incorporated on 3 March last year, NFT Investments was launched by Jonathan Bixby and Mike Edwards, the co-founders of Argo Blockchain (ARB.L), a London-listed crypto mining company valued at more than $1bn.
Susannah Streeter, a senior investment analyst at Hargreaves Lansdown, said: "The music industry, in particular, sees NFTs as a way of bringing value back to artists after streaming models have nibbled away at revenues.
"By distributing ownership of limited edition albums, tickets and artworks via NFTs, bands also see NFTs as a way of reconnecting with their fan bases, offering them a slice of exclusive digital content. Each token is different, and their limited nature means they can be auctioned or traded."
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