Just like last summer’s high-frequency bet on DeFi by VC, the recent fire NFT has also become a popular investment track in the primary market.
According to incomplete statistics, VC invested nearly US$400 million in NFT-related projects in the first quarter of this year. The investment frequency was the highest in March, with an average investment and financing completed in two days, an increase of 220% from the previous quarter.
Which type of NFT projects are most favored by VCs? Who is the project/team with the most VC funding? Who is the VC with the most layouts on the NFT track?
1. VC’s most favored NFT investment track: trading platform
Since the beginning of the year, VC has invested in 22 NFT projects, of which trading platforms accounted for one-third, becoming a subdivision investment track sought after by institutions.
According to statistics, 7 NFT transaction projects received VC investment in the first quarter, and the accumulated financing amount reached 35 million U.S. dollars. Given that three of them have not announced the amount of financing, the scale is larger than what we currently know.
Among these seven projects, Opensea has received the most VC investment, reaching 23 million US dollars, which is 10 times higher than Rarible and BCAEX.
It should also be noted that among the 7 projects supported by VC, Bounce Finance is not a natural NFT track. It plans to use the funds raised to establish an NFT market and e-commerce platform, which indirectly indicates that capital is optimistic about the NFT market.
●SuperRare
SuperRare was established earlier and entered the NFT market in April 2018. It supports users to create, sell, and collect rare digital artworks. The platform is characterized by strict selection of artists.
Financing amount: 9 million US dollars
Round: A round
Investors: Velvet Sea, 1confirmation, Mark Cuban, Chamath Palihapitiya and Marc Benioff
●BCAEX
BCAEX is under the umbrella of the encrypted art NFT platform BCA (BlockCreateArt), focusing on the direction of NFT trading. It was launched in October last year and officially announced that there are 225 signed artists.
Financing amount: USD 2 million
Round: Angel round
Investors: Fenbushi Capital, Zonff Partners, Waterdrop Capital and multiple angel investors
●Opensea
Opensea is a long-established trading platform in the NFT market. It was established at the end of 2017 and officially launched at the beginning of 2018. The total transaction volume of the platform exceeded US$100 million in March this year, a record high.
Financing amount: USD 23 million
Round: A round
Investors: a16z, Cultural Leadership Fund, Ron Conway, Mark Cuban, Tim Ferriss, Belinda Johnson, Naval Ravikant and Ben Silberman
●Mintable
Mintable is a community-driven NFT platform that supports users to create and trade NFT products. It was established at the end of 2018. If users trade on this platform, in addition to receiving the purchased NFT, they can also automatically obtain an NFT with voting rights.
Financing amount: undisclosed
Round: Seed round
Investors: Mark Cuban, owner of Dallas Mavericks, CRC Capital, Time Ventures, Sound Ventures, Defiance Capital, DeFi Alliance, and Lunex Ventures
●NFTMart
NFTMart aims to build a decentralized NFT trading platform and establish its own vertical public chain. According to the official introduction, the platform is divided into two parts, one is nftmart.network (an open decentralized NFT public chain, which is mainly used to publish NFT assets and process transaction data on the chain), and the other is the entrance to the nftmart.io platform. Provide users with NFT trading venues.
Financing amount: undisclosed
Round: Seed round
Investors: PAKA, LD Capital, CMS, AU21 Capital, DFG and Crasolum
●Rarible
Rarible was launched in 2019 and supports users to create and trade NFT products. The platform launched its native token RARI through “market liquidity mining” in July last year.
Financing amount: 1.75 million US dollars
Round: Seed round
Investors: 1kx, ParaFi Capital, Coinbase Ventures, CoinFund, MetaCartel Ventures and Bollinger Investment Group
●Bounce Finance
Bounce Finance is a batch auction tool based on Ethereum. It was launched in July last year. Its founder Chandler Song also participated in the founding of Ankr. In March of this year, Bounce completed a new round of financing led by Coinbase. It plans to use the financing amount to establish an NFT market and e-commerce platform. The founders call it “Shopify for NFTs.”
Financing amount: undisclosed
Round: undisclosed
Investors: Coinbase, Pantera, Hashed, Fundamental Labs, DHVC, Blockchain Capital and SNZ Capital
2. The team/project with the most VC bets: Dapper Labs
From CryptoKitties to NBA Top Shot, and public chain Flow, Dapper Labs has continuously created explosive products, and has also developed from a pure product development team to a pioneer in the infrastructure of the NFT market.
By constantly proving itself, Dapper Labs has gradually become a star team in the NFT market. Under the market law of “investment is investment”, Dapper Labs’ capture of $305 million in market performance is no longer so surprising.
According to public information, Dapper Labs has received a16z, Union Square Ventures and other top venture capital in the new round of financing, as well as more than 30 professional athletes such as Michael Jordan (Michael Jordan) raised 305 million US dollars, its financing scale is second only to Bit Mainland China (US$1 billion) and BlockFi (US$350 million), temporarily ranking third in the history of encryption.
●Dapper Labs
Financing amount: 305 million US dollars
Investors: Coatue, a16z, The Chernin Group, Union Square Ventures, Venrock, Michael Jordan, Vivek Ranadive (owner of the Sacramento Kings), and more than 30 professional athletes including Kevin Durant
●Opensea
Opensea is a long-established trading platform in the NFT market. It was established at the end of 2017 and officially launched at the beginning of 2018. The total transaction volume of the platform exceeded US$100 million in March this year, a record high.
Financing amount: USD 23 million
Round: A round
Investors: a16z, Cultural Leadership Fund, Ron Conway, Mark Cuban, Tim Ferriss, Belinda Johnson, Naval Ravikant and Ben Silberman
●Enjin
Enjin is a blockchain game development platform, founded in 2009, and supports users to deploy replaceable and non-fungible tokens using Web Panel. Its native token, ENJ, will be launched on Coinbase Pro soon. In February of this year, the platform announced a collaboration with the AR platform MetaverseMe to create a virtual character NFT on Ethereum. By March, Enjin completed a private placement round of financing, and plans to use the funds raised to establish the Polkadot-based NFT public chain Efinity.
Financing amount: US$18.9 million
Round: Private placement round
Investors: Crypto.com Capital, DFG Group, Hashed, Hypersphere, BlockTower, Blockchain.com Ventures, Fenbushi, Iconium, HashKey, Arrington XRP Capital and DeFi Alliance
3. Investing in institutions with higher frequency of NFT: NGC, DFG, Delphi Digital
In the first quarter, NGC, DFG, and Delphi Digital each invested in three NFT projects. In comparison, the frequency was higher, but it did not make a big gap with other VCs such as IOSG and Hashkey.
Judging from the projects invested by NGC, DFG, and Delphi Digital, DFG has the clearest investment ideas. Its capital injection projects are all over the market, midstream and downstream (upstream: trading platform; midstream: collectibles; downstream: public chain). A chain layout is basically formed; NGC and Delphi Digital tend to invest in emerging projects, such as auction agreements and NFT brand experience companies.
●NGC
Founded in December 2017, NGC Ventures is one of the largest institutional investors in blockchain and distributed ledger technology. It is also a leading blockchain project such as Zilliqa, Ontology, NKN, Oasis, Mainframe, Certik, Bluzelle, and Iotex. Key contributor.
In the first quarter of this year, NGC invested in NFT projects:
My Neighbor Alice (NFT game)
My Neighbor Alice is a blockchain multiplayer construction NFT game. Players can build their own virtual land, interact with neighbors, perform daily activities and get rewards.
FM Gallery (NFT artwork distribution platform)
FM Galleryh is an NFT artwork distribution platform. It plans to introduce the concept of DAO to build an autonomous community of fans.
TopBidder (NFT auction agreement)
TopBidder is an NFT bidding protocol based on radical market theory, mainly bidding for encrypted artworks and collectibles
●DFG
DFG (Digital Finance Group) was established in 2015, focusing on investment in encrypted digital assets and blockchain technology. Its early investment portfolio includes projects such as Bloq, Brave, Ledger X and Circle.
In the first quarter of this year, DFG invested in NFT projects:
Polkamon (Digital Collectibles Project)
Polkamon is a beautiful animated digital collectible project created using blockchain technology. Each Polkamon has a truly unique NFT support and can be purchased with PMON tokens.
Efinity (NFT public chain)
Efinity is the NFT public chain that Enjin plans to launch for the blockchain game development platform. The latter was launched in 2009 and supports users to deploy replaceable and non-fungible tokens using Web Panel.
NFTMart (NFT trading platform)
NFTMart aims to build a decentralized NFT trading platform and establish its own vertical public chain. According to the official introduction, the platform is divided into two parts, one is nftmart.network (an open decentralized NFT public chain, which is mainly used to publish NFT assets and process transaction data on the chain), and the other is the entrance to the nftmart.io platform. Provide users with NFT trading venues.
●Delphi Digital
Delphi Digital is an independent cryptocurrency research institution. In July last year, it established Delphi Ventures, a venture capital unit, which will focus on providing long-term financial support and intellectual support for the most promising projects in the crypto field.
In the first quarter of this year, Delphi Digital invested in NFT projects:
Illuvium (NFT game)
Illuvium is an open world RPG game that includes collections and automatic battle elements. In the third quarter of this year, the project will launch the Ethereum second-tier solution Immutable X.
Recur (NFT brand experience company)
Recur is an NFT brand experience company, which aims to design and develop an on-chain brand experience to facilitate users to purchase, collect, and resell NFT.
Yield Guild Games (NFT decentralized autonomous organization)
YGG mainly helps investors gather assets and bet on NFT to make profits, and ultimately share the profits with supporters. Currently, YGG mainly focuses on the field of NFT games.
Fourth, the conclusion
Looking at the Q1 investment and financing dynamics, we can find that VCs began to bet frequently on NFT projects in March, and the scale of capital injection was much larger than that in January and February.
However, it needs to be pointed out that the reason for the high inflow of funds in the NFT market in March is that Dapper Labs received US$305 million in funding, which is almost 4.7 times the total financing of other NFT projects in the same period.
From the perspective of investment types, trading platform projects are most popular with VCs, and the reasons are not difficult to understand. NFT is essentially an asset. With the gradual expansion of the market in the future, the trading platform at the top of the pyramid will inevitably receive market dividends first, while VCs that are deployed early can share the pie.
In addition to the trading platform, VCs such as Dragonfly Capital are also paying attention to NFT social projects. On the one hand, although NFT belongs to a niche circle, the participating artists or buyers have a strong consensus on the market. If a platform can link and gather these people, this can largely form an early barrier to competition; On the other hand, unlike the homogenized token trading, the NFT trading market involves more people’s concepts, ideologies, etc., while the emergence of social projects provides a place for “export.”
On the whole, the NFT market is at a very early stage, and the financing process of most projects is in the seed round stage. Only Opensea and SuperRare have completed the A round of financing. In addition, the NFT market infrastructure is not yet mature, and the market structure has not yet taken shape. In this context, those VCs with early layout and sharp vision are expected to capture NFT projects that may become “unicorns”.
Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.