Gaming and Compliance Attract Investors

Key Takeaways

• Gaming projects raised $825 million in capital this week, compliance projects raised over $25 million in aggregate funds, decentralized protocols brough in $37.2 million this week.
  
• Deal of the Week: Forte.io has raised a $725 million Series B funding round. The Company had raised a $185 million round at a $1 billion valuation in May.
  
• Argo Blockchain, a cryptocurrency miner, will sell up to $57.5 million in bonds maturing in 2026.
  
• Active investors this week include Sequoia Capital, a16z, Jump Capital and Solana Ventures.

Venture Capital Deals

Solidus Labs is an automated, comprehensive and testable market surveillance and risk monitoring hub tailored for digital assets. The Company has raised $15 million in a Series B round led by Liberty City Ventures. Other investors that participated include GSR and Exor Seeds. Earlier this summer, the Company raised $20 million in a Series A funding round. The platform seeks to make digital asset compliance simpler and more effective (Risk monitoring firm Solidus Labs completes $15M strategic round). 

Parallel Finance is a decentralized lending, staking and borrowing platform built on the Polkadot ecosystem. Sequoia Capital has invested in a $1+ million token fundraising at a $250 million protocol valuation. The project raised $22 million in a Series A funding round at a $150 million valuation in August. Sequoia has become more active in digital asset investments and plans to continue to grow their portfolio in the nascent industry (Sequoia Invests in $1M+ Token Fundraising Round for Parallel Defi Project).

Matter Labs is scaling the Ethereum platform with zero-knowledge proofs. The technology will enable mainstream adoption of public blockchains. The Company has raised $50 million in a Series B funding round led by a16z with Blockchain.com, Crypto.com, ConsenSys, Bybit, OkEx, Alchemy, Covelant, Aave, Lido, FutureSwap, and other investors participating. The technology is designed to speed up transactions and has been live on the Ethereum mainnet since July 2020 (Matter Labs scores $50M from a16z to bring zero-knowledge rollup scaling to Ethereum).

Japanse Yen Stablecoin Coin Company (JPYC) is the issuer of a Japanese yen-pegged stablecoin. The project has raised ~$4.4 million in a Series A funding round with participation from Circle Ventures and other investors. Circle is the second largest stablecoin issuer (USDC). The aim of Circle’s investment is to conduct stablecoin experiments with the Monetary Authority of Singapore (MAS). MAS has a notorious initiative – Partior, a joint venture between DBS Bank, JP Morgan and Temasek which is working on a retail central bank digital currency (CBDC). Circle is in the process of going public via a special purpose acquisition company (SPAC) (Circle’s New VC Fund Backs $4.4M Funding Round for Japanese Stablecoin Issuer).

Notabene is a cryptocurrency compliance Software-as-a-Service (SaaS) company that provides services to cryptocurrency exchanges and other customers to comply with the Financial Action Task Force (FATF) and other compliance matters. The startup has raised $10.2 million in a Series A funding round led by F-Prime and Jump Capital at a $45 million valuation. New investors in the round include cryptocurrency exchanges Luno, Bitso, as well as venture funds such as MCT Digital, Fenbushi Capital among others. Services provided by companies like Notabene have become crucial for exchanges as the global regulatory environment has become  more stringent (Notabene raises $10.2M to help crypto exchanges comply with new global regulations).

Genius Yield is a Cardano-native decentralized exchange (DEX) and yield protocol. The project has raised $4.2 million in a Seed investment round. Participating investors include Master Ventures, Genblock Capital, CSP DAO, Sneaky Ventures, Cardano Syndicate, Bloctech Investment Group, Kernel Ventures, Valhalla Capital, among others. The project seeks to provide capital efficiency and increase control for liquidity providers and more flexible fee structures by applying the same principle as Uniswap 3 (Genius Yield: Cardano-powered raises $4.2 million in the seed round).

Token Sales

Agoric is a decentralized finance (DeFi) smart contract platform built on the Cosmos software development kit (SDK) running a proof-of-stake(PoS) mechanism. The project has raised $32 million in a private token sale. Investors that participated in the token sale include Placeholder, NGC Ventures, Spartan Group, Compound VC, Acrew Capital, Chorus.one and Figment. Agoric plans to help the JavaScript developer community, which has close to 15 million members (Cosmos-based smart contract platform Agoric raises $32 million, launches mainnet).

New Venture Capital Funds

Solana Ventures, Lightspeed Ventures and FTX have teamed-up to launch a $100 million gaming fund. Well-known venture capital firms are betting on Web 3.0 gaming (GameFi) as the industry has grown exponentially and are looking to capitalize on the technology that is merging traditional gaming and blockchain. The VC firms in the new partnership have already invested substantial capital in the space in projects like Wintermute, Epic Games, and other projects. Overall, GameFi projects have been receiving mega-funding deals, such as Mythical Games, Forte.io, Faraway, among others (Solana Ventures, FTX, and Lightspeed Launch $100 Million Blockchain Gaming Fund).

Crypto Capital Markets

Argo Blockchain is a cryptocurrency mining company. Argo has filled to raise up to $57.5 million in 5-year senior notes due November 2026.  The use of proceeds will be to build out a cryptocurrency mining facility in Texas, fund potential acquisitions, and fund general corporate purposes. In October, the mining company mined 167 Bitcoins, with mining revenue of $9.75 million and a margin of approximately 86%. Cryptocurrency mining companies have been active in the traditional finance capital markets this year with competitors like Greenidge Generation Holdings already accessing the markets through a $50 million bond offering. (Argo Blockchain PLC announces proposed Public Offering).

Deal of the Week                          

Forte.iois an end-to-end solutions platform for token based-game economies and NFTs that seeks to provide liquidity for players who want to monetize on in-game accessories. The platform has raised $725 million in a Series B funding round led by Sea Capital and Kora Management. Other investors that participated in the funding round include Animoca Brands, Big Bets, Overwolf, Playstudios, Waner Music Group, zVentures, Cosmos, Polygon Studios, Tiger Global and Solana Ventures.

Why is this a Big Deal ?

The blockchain gaming industry has been one of the fastest growing sectors in the blockchain space in 2021. The market has continued to see mega-funding rounds such as Mythical Games, The Sandbox, Faraway, among others. Investors have understood the value proposition of play-to-earn (P2E) digital ecosystems and are now betting big in the space. Currently, the platform has an invite-only private testing phase that is backed by over 40 developer partners and has north of 15 million players across partner games. In May, Forte raised $185 million in a Series A funding round at a $1 billion valuation. Year-to-date, Forte has raised a total of $900 million. The rise of the blockchain Metaverse continues to drive growth for gaming, NFTs, and digital assets, and we expect this trend to continue to bring additional players into the space (Forte raises $725M for compliant blockchain gaming platform).