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- It’s already a hot year for NFT startups: Three have raised rounds of $100 million or more.
- This compares to the $37 million raised in all of 2020.
- The startups are OpenSea, Autograph, and Pixel Vault. Here’s why VCs are so bullish on them.
Every day the tech world hears new stories of people getting rich on nonfungible tokens. NFTs are unique, creative digital works that live on the blockchain.
But potentially greater riches lie in store for the startups and their investors building the infrastructure to create and host NFTs.
In 2020, before much of the world had ever heard the term NFT, there were 21 fundraising deals for NFT-related startups that totaled $37 million, according to a report by CB Insights on the state of blockchain. In 2021, that number exploded to 259 deals totaling $4.8 billion. CB Insights’ 2021 report, which tracked over 3,000 blockchain and crypto companies, found that gaming, marketplaces, and infrastructure drew in the most funding.
And one month into 2022, three NFT startups have already closed on fundraising deals of more than $100 million in VC investment, according to PitchBook’s database.
The deal: $300 million on January 4 from Coatue Management and Paradigm with other undisclosed investors
Total raised: $423.12 million
Post-money valuation: $13.30 billion
Founded in 2017, this marketplace for crypto assets and digital collectibles made a mark in the NFT industry by being the first and largest place to buy and sell NFTs on the ethereum blockchain. It hosts over 600,000 users looking to buy and sell more than 80 million NFTs on the markeplace, the company says.
“We’re dedicated to empowering creators and communities of all kinds to achieve economic independence in a new digital economy,” a company spokesperson told Insider in an email.
OpenSea plans to spend its Series C funding on hiring, improving customer support and safety, product development, and to “invest in the wider NFT and Web3 community,” Devin Finzer, cofounder and CEO of OpenSea, said when the company announced the funding.
This includes improving NFT discoverability and management through analytics and presentation. OpenSea will also launch a grant program for NFT developers, builders, and creators.
The deal: $170 million on January 4 from Andreessen Horowitz, Kleiner Perkins, KRH, and Nicole Quinn.
Total raised to date: $205 million
Post-money valuation: $3.17 billion
Startup profile: Cofounded by the NFL quarterback Tom Brady in 2021, this entertainment NFT startup, based out of Los Angeles, now has 62 employees.
This Series B round will help the company pursue its goal of creating digital collections from sports, entertainment, and culture influencers.
Such experiences include access to its Discord , happy hours to meet in person before sports events, and a “collector score” and challenges in which participants earn points by buying collections. Tallied points could later grant access to exclusive NFT releases, physical merchandise, or exclusive events.
“Autograph has assembled a world-class team that understands how to build trusted, delightful product experiences that will accelerate the mainstreaming of crypto,” the investor Katie Haun said in a press release.
Its board of advisors includes notable sports names such as Simone Biles and Tiger Woods.
The deal: $100 million on February 2 from Velvet Sea Ventures and 01 Advisors
Total raised: $100 million
Post-money valuation: N/A
Startup profile: Founded in 2021, this startup wants to decentralize the entertainment industry and allow creators and their fans access to their own intellectual property.
With over 100,000 unique NFTs, including Punks Comic and MetaHero, Pixel Vault ranks as one of the most popular NFT collectible projects, behind Yuga Labs’ Bored Ape Yacht Club franchises and Larva Labs’ Cryptopunks, according to Velvet Sea Ventures.
“We do not look at the fan as the customer – our fans are the owner and the builder,” Sean Gearin, Pixel Vault’s CEO, said in a statement.
To Pixel Vault that looks like content creators and collectors not only buying and selling NFTs but also trading characters and voting on changes in its narrative universes, like Punks Comic and MetaHero.
This new funding will help the company expand its projects into television, movies, and video games, according to Velvet Sea Ventures.