Venture Capital Deals
Espresso Systems is a new layer 1 blockchain protocol that uses Proof-of-Stake consensus with zero-knowledge rollups in order to maintain user privacy while also improving transaction speed and costs. The project raised $32 million in a seed round led by Greylock Partners and Electric Capital, with Sequoia Capital, Blockchain Capital, and Slow Ventures also participating in the round. Espresso’s differentiator is its smart contract application that allows developers to customize the level of privacy that they offer to users while also supporting wrapped ERC-20 tokens at launch and NFT capability as the next step in the roadmap. (Espresso Systems Raises $32M to Bring Scaling and Privacy to Web 3)
Blockmetrix is a Bitcoin mining startup that is using joint ventures in acquiring mining sites in order to share development and power costs with its partners in each location. The company raised $43 million in a Series B round that will be used to purchase 5,000 new mining rigs for a co-location facility in Texas. The expansion will multiply their current mining fleet by 6x from their first deployment of 1,000 rigs in June 2021. Because share of network hashrate plays a major role in calculating mining revenue, Blockmetrix is attempting to rapidly outscale the global mining network in order to boost revenues. (Bitcoin Mining Startup Blockmetrix Raises $43M in Series B Round)
Lunar is a Danish neobank that recently released a crypto trading platform for its customers to trade Bitcoin, Ethereum, Cardano, Polkadot, and Dogecoin. The company raised $77 million in an extension of its $232 million Series D in July 2021. The extension valued Lunar at $2 billion and was led by Heartland with participation from Kinnevik, Tencent, and IDC Ventures, among others. The goal of the funding is to further develop Lunar’s crypto trading platform to integrate crypto trading into banking so that customers can go to one place for all of their financial activities. (Nordic Fintech Lunar Raises $77M, Builds Crypto Trading Platform)
Space Runners is an NFT and digital wearables startup trying to create SPACEverse, a fashion metaverse where users can purchase NFTs to incorporate into other platforms or use to redeem for access to real-life or virtual special events. The company raised $10 million in a round led by Pantera Capital and Polychain Capital with participation from Jump Crypto and Accel, among others. The funding will help to build out their ecosystem and launch more NFT collections like their NBA Champions Sneaker Collection. (Space Runners raises $10 million to build a blockchain-backed fashion metaverse)
Hubble Exchange is an Avalanche-based, decentralized perpetual futures trading platform where users can use assets like Bitcoin, Ethereum, and USDC as collateral for futures contracts. The project raised $3.3 million in a seed funding round led by Framework Ventures with participation from Lemniscap, Blizzard, and Trader Joe, among others. After Hubble’s successful testnet release in October, the company is expecting to launch on the Avalanche mainnet in April. The funds raised will help with hiring engineers to make sure the protocol is ready for its mainnet launch. (Hubble Exchange Raises $3.3M to Put Perpetual Futures on Avalanche)
KurateDAO is a DAO that is trying to decentralize content moderation and curation for internet databases. The group closed a $6.9 million seed round led by Polychain Capital. At the moment, this curation is entirely handled by the search engine companies, giving centralized companies complete control over what content can appear online as well as how that content is curated. KurateDAO separates the process into curators, scouts, and viewers, each governed by a DAO to crowdsource online information and determine what gets added to the database. The funding will be used to expand the platform from Ethereum to operate on more blockchains. (Polychain Leads $6.85M Investment in ‘Curate-to-Earn’ Project)
Upstream is a decentralized autonomous organization (DAO) infrastructure provider that lets users build, launch, and manage DAOs without any coding experience. The project closed a $12.5 million Series A round led by Boldstart Ventures in concert with a public launch of its Upstream Collectives platform. Other participants in the round include Ibex Investors, Tiger Global, Fenbushi Capital, and Vayner Fund, among many others. The capital will be used to scale the Upstream Collectives platform to create a Squarespace for DAOs. (DAO Creation Platform Upstream Raises $12.5M and Launches Publicly)
WalletConnect is a product that allows users to directly communicate with wallets on the Ethereum blockchain, a similar idea to Dialect from last week’s Deal of the Week. The company raised $11 million in a Series A led by Union Square Ventures and 1kx. WalletConnect is using the funding to help develop a multi-protocol network that would be able to connect wallets across multiple blockchains to vastly increase interconnectivity in Web3’s future. (WalletConnect Raises $11M to Let Crypto Wallets Talk to Each Other)
UNXD is a metaverse fashion company that partners with designers and brands to create luxury NFT wearables collections to be used in the metaverse. The company raised $4 million in a funding round led by Animoca Brands, Polygon Studios, and Red DAO. Metaverse fashion has been a growing trend, attracting brands like Nike and Adidas to work on developing NFT avatars and wearables. UNXD partnered with Dolce & Gabana to expand that trend into luxury NFTs, and is working with Decentraland to host a Metaverse Fashion Week later in March. (UNXD Raises $4M to Bring Luxury Fashion to the Metaverse)
Token Sales
Outer Ring MMO is a massive multiplayer online sci-fi game built for the metaverse where players explore an open universe with the opportunity for social interactions with other players. The game raised $1.6 million in USDT from an Initial Dex Offering (IDO) on PancakeSwap. Outer Ring has a player-driven economy for trading and interacting with NFTs and other tokenized assets that uses Galactic Quadrants ($GQ) and Exo Credits for brands to offer products integrated into gameplay. The next step on the roadmap are to release lootboxes for players to acquire NFT ships, materials, and clan banners ahead of the Alpha launch. (Outer Ring MMO’s IDO raises 1.6M USDT in 24 hours)
Crypto Capital Markets
Public is a fractional investing platform where users can purchase fractional shares of stocks and ETFs. The company is acquiring Otis, an NFT auction platform for investors to mint an NFT that represents ownership of a real-world asset and then fractionalize and trade the NFT. The acquisition is a natural expansion for Public to integrate its experience and technology with Otis, capitalizing on the vast uptick in NFT adoption. (Fractional Investing Company Public Acquires NFT Startup Otis)
New Venture Capital Funds, Ecosystem Funds, and Alliances
Bain Capital Ventures is one of the largest venture capital firms with over $5 billion in AUM that has already been an active investor in the crypto space. The firm has raised $560 million for its first crypto-focused fund, the BCV Fund 1, that will make long-term investments in around 30 startups over the next two to three years. Another goal for BCV is to gain the ability to actively participate in governance of the projects that it invests in. The fund has already invested $100 million in 12 undisclosed projects. (Bain Capital Ventures launches crypto-focused fund worth $560 million)
Griffin Gaming Partners is a Web3 gaming-focused venture capital firm with over $1 billion in AUM. The company raised a $750 million Web3 fund, Griffin’s Fund II, in order to invest in the development of the Web3 infrastructure and ecosystem that will help enable widespread adoption of digital asset ownership in games. The fund has already deployed around half of its capital across 16 Web3 startups, and the rest will be used to participate in seed and growth rounds for software and social platform infrastructure projects. (Griffin Gaming Partners Raises $750M Fund With Eye on Web 3)
Cake DeFi is a crypto DeFi platform with over $1 billion AUM where users can buy, lend, and stake crypto holdings. The company is starting a $100 million self-funded venture capital arm, Cake DeFi Ventures (CDV). CDV will invest primarily in fintech and Web3 startups as well as metaverse tech startups around NFTs and gaming. The fund will be led by Cake DeFi’s co-founders and act as a financier and provide industry insights and connections for their investments, but will be hands-off when it comes to operations (Cake DeFi launches $100M venture arm for Web3, gaming and fintech initiatives)
Okcoin is a crypto exchange for users to buy and trade cryptocurrency spots that has garnered over 100 thousand investors across 192 countries. The company is partnering with Stacks to run a $165 million fund that will invest in projects aimed at boosting adoption of Bitcoin. The fund, Bitcoin Odyssey, is backed by DCG, GBV Capital, White Star Capital, and GSR, among others. Stacks is a layer 1 smart contract blockchain designed to bridge to Bitcoin, bringing smart contract capability to Bitcoin so the “King of Crypto” can be used on-chain for NFTs, decentralized lending, etc. The fund is likely to focus on projects like Stacks that increase the utility of Bitcoin to match that of other chains like Ethereum, Solana, etc. (Okcoin launches $165M collective investment to push Bitcoin adoption)
Deal of the Week
Immutable ($IMX) is a decentralized NFT scaling and gaming platform that has produced games such as Gods Unchained and Guild of Guardians, while also creating Immutable X, a zero-gas fee NFT infrastructure platform for game developers to create their own games, applications, and marketplaces. The company closed a $200 million Series C round led by Temasek, making Immutable a new unicorn with a valuation of $2.5 billion. Other participants in the funding round include Animoca Brands, Tencent, Arrington Capital, and ParaFi Capital, among others.
Why is this a Big Deal
We have seen a large wave of game developers leaving big-name traditional developers like Riot Games and Bungie for opportunities in Web3. In Web3, ownership of gaming projects are decentralized, allowing developers more freedom in pursuing creative ideas while sharing any successes from those ideas with the gaming community. Immutable is trying to position itself to provide the infrastructure and financial support for game developers to match the quality and output of the traditional gaming industry. Venture capital is betting on Immutable. This week’s funding raised the company’s valuation to $2.5 billion, a 6x jump from the previous valuation at $410 million after a Series B six months prior. With this funding round, Immutable is planning to add 200 employees across its sales, marketing, engineering, and product teams over the next 12 months, which will more than double its current team. Other opportunities with the funding include exploring M&A opportunities for customer and product growth, actively grow institutional adoption of its Immutable X layer 2 network and expand operations to a more global scale. All of these developments for continuing growth come on the heels of a major deal with GameStop that included a $100 million grant to sponsor game developers through the platform. (Immutable Raises $200 Million in Temasek-Led Series C, NFT Startup Now Valued at $2.5 Billion)