Record new VC funds, more SPACs, and IPOs

Key Takeaways

• New Venture Capital funds raised an aggregate $2.76 billion this week. Gaming projects raised $13.5 million in capital, while Ethereum-based building companies raised $250 million this week. Bitcoin mining company Bitdeer will go public via a SPAC valued at around $4 billion. Iris Energy is a Bitcoin mining company that went public via an IPO and upsized its offering to be valued at roughly $1.5 billion at the time of going public.
  
  
• Deal of the Week: ConsenSys, the creator of MetaMask wallet has successfully raised a strategic funding round of $200 million at a $3.2 billion.
  
  
• Active investors this week include Alameda Research, Sino Global and Mechanism Capital.

Venture Capital Deals

Fracture Labs is a blockchain video game developing company. Their acclaimed game called Decimated is a multiplayer survival game that was awarded the best blockchain game at the 2019 Crypto Games Conference. The Company has raised $3.5 million from investors like Alameda Research, Huobi Ventures, Spartan Group, Mechanism Capital, among others. Fracture Labs raised $4 million via a private token sale in October 2021. Blockchain-based games have been investors’ biggest bet in 2021, as the play-to-earn (P2E) sector has grown tremendously. (Blockchain Gaming Developer Fracture Labs Raises $3.5 Million Funding Round)

Cypher is a Solana-based traditional futures platform. The project will allow investors to trade contracts that capture potential soon-to-launch tokens and help price discovery. The platform has raised $2.1 million. Sino Global, Skyvision and Blockwall were the venture capital firms backing the deal. Solana-based projects have been raising large sums of capital to be able to build projects and attract users. (Cypher Raises $2.1M for Traditional Futures Market on Solana)

PrivacySwap is a multi-chain aggregator that enables Web 3.0 wallet to connect directly to any card infrastructure solutions, allowing interoperability of on-chain data with traditional financial services. The company has raised $1 million from a family office as it works on bringing cards and associated PrivacySwap Oracle into the decentralized finance (DeFi) space. Via PrivacyCard, traditional investors will be able to spend their earned yield at traditional outlets. (PrivacySwap raises $1M from Wallstreet Veteran Family Office to boost project)

PStake ($PSTAKE) is a liquid staking protocol where assets staked are delegated to a set of safelisted validators of the underlying network. The Company has raised a  $10 million funding round let by Three Arrows Capital, Galaxy Digital, Sequoia India and Defiance Capital. Additional investors include Coinbase Ventures, Kraken Ventures, Alameda Research, and others. PoS token (i.e. ATOM) holders can deposit their tokens on the pSTAKE application to mint 1:1 pegged ERC-20 wrapped unstaked tokens, which are represented as pTOKENs (i.e. pATOM) that can be transferred to other wallets or smart contracts on the Ethereum Network to generate additional yield. (Liquid Staking Protocol PStake Raises $10M in Strategic Funding)

StarkWare is an Ethereum Layer 2 developer using zero-knowledge-rollups (ZK-rollups) technology. The Company has raised $50 million in a Series C funding round at a $2 billion valuation. Several top projects use StarWare’s technology such as dYdX, Sorare, and Immutable. The Company plans to launch StarkNet Alpha on mainnet Ethereum this year, which will bring permissionless decentralized ZK-rollups that supports independent deployment of smart contracts. (Blockchain Firm StarWare Valued at $2 Billion in Funding Round)

CyberConnect is developing tools for Web 3.0 social media, gaming, and metaverse applications. The Company has raised $10 million in a seed funding, led by Multicoin Capital and Sky9 Capital with Animoca Brands, Draper Dragon, Hashed, Zoo Capital, Smrti Labs, and other investors participating. The protocol will launch this year with support from Ethereum and plans to integrate other blockchains further on the roadmap. (Web3 social infrastructure startup CyberConnect raises $10 million in seed funding)

New Venture Capital Funds

Paradigm is an investment firm focused on blockchain Web 3.0 companies and protocols. The firm has announced the biggest cryptocurrency fund at $2.5 billion. Some of Paradigm’s most notable investments include FTX, Coinbase, BlockFi, Maker, Uniswap and Sky Mavis, the creator of Axie Infinity. Earlier this year, Andreessen Horowitz (a16z) created a $2.2 billion venture capital fund. Crypto and blockchain dedicated venture capital funds have been on the rise in 2021 and we expect more institutional capital coming into the industry as crypto and blockchain continue to go mainstream. (Crypto Venture Firm Paradigm Announces $2.5B Fund, Industry’s Largest)

KuCoin Labs is the investment and research firm out of KuCoin, the cryptocurrency exchange. KuCoin Labs has created a $100 million fund solely dedicated to projects in the metaverse. Metaverse has been the hottest sector this year. Facebook rebranded itself to Metaverse, Nike has partnered with Roblox to create Nikeland, and more traditional institutions are joining the metaverse. Venture capital for metaverse dedicated funds has grown immensely, bringing mega-round investments in metaverse projects such as  Mythical Games, The Sandbox, Faraway, among others. (KuCoin Labs Launches $100M Fund for Metaverse Projects)

Oasis Foundation is the organization behind Cosmo-native privacy-enabled blockchain Oasis Netork. The Foundation has launched a $160 million fund that will focus on financing Oasis-native decentralized applications covering decentralized finance (DeFi), non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), and the metaverse. Several well-known venture firms are supporting the Oasis Foundation, such as Dragonfly Capital, Draper Dragon Fund, Electric Capital, FBG, Jump Capital, Kenetic Capital, NGC Ventures and Pantera Capital. Oasis is a Proof-of-stake (PoS) blockchain designed using the Cosmo SDK. (Oasis Launches $160M Ecosystem Fund With Backing From Jump Capital)

Crypto Capital Markets

Iris Energy is a Bitcoin mining company headquartered in Australia. Initially providing energy services, the company is now a dedicated Bitcoin miner. The Company had previously announced its plans to go public via an initial public offering (IPO) in the United States. This week, the firm announced that its 8.26 million ordinary shares will be priced at $28 per share, from its initial price range of $25 – $27 per share. The transaction will value Iris Energy at roughly $1.5 billion. In October, the company raised $115 million in a debt issuance transaction. Iris has signed contracts with Bitmain for ~150,000 rigs with an estimated computing power of 14.5 EH/s, equating to ~10% of BTC’s current network harsh rate. (Bitcoin miner Iris Energy Upsizes Its IPO, Valuing Company at $1.5B)

Marathon Digital is one of the largest Bitcoin mining firms in North America. The company currently has a hash rate of 13.3 EH/s with a blended mining cost of $6,235/BTC. Marathon announced the pricing of a $650 million aggregate principal amount of 1.0% convertible notes due 2026. The offering was upsized from an initial amount of $500 million. Recently, Marathon mentioned that it received a $100 million revolving line of credit from Silvergate which was backed by BTC and USD. The Company holds 7,453 BTC worth nearly $500 million. (Marathon Digital Raises Notes Offering Size to $650M)

Bitdeer Technologies is a Bitcoin mining company. The Company operates five cryptocurrencies mining data centers in the United States and Norway. Bitdeer announced that it will merge with special purpose acquisition company (SPAC) Blue Safari Acquisition Corp. The deal is valued at almost $4 billion. On top of mining, the company provides technology and mining services for Bitcoin miners including miner sourcing, transportation logistics, data center designs, construction of data centers, machine management and daily operations. (Jihan Wu’s Bitcoin mining outfit Bitdeer plans public listing via a $4 billion SPAC merger)

Tokens.com is a publicly-traded company that invests in revenue-generating crypto and blockchain assets linked to decentralized finance (DeFi), non-fungible tokens (NFTs), and metaverse real estate. The Company has successfully closed a $16 million private placement. The offering was led by Stiefel GMP with a syndicate of institutions participating such as PowerOne Capital Markets, Canaccord Genuity, Eventus Capital and Richardson Wealth Limited. More traditional financial institutions continue to invest in DeFi, NFTs, and the metaverse. This deal showcases the demand from investors to have access to blockchain and digital assets. (Tokens.com Announces Closing of $16 Million Private Placement)

Digital Currency Group (DCG) is a corporate venture capital firm that invests, builds and supports Bitcoin and blockchain companies. After selling $700 million in secondary stock at a more than $10 billion valuation two weeks ago, the Company has now raised $600 million in a new credit facility. The financial institutions that participated in the transaction include Capital Group, Davidson Kempner Capital Management, Francisco Partners, among others. DCG has been actively investing in blockchain companies and cryptocurrency platforms. The company currently has more than 200 portfolio companies, including notable companies such as Grayscale, Genesis, CoinDesk, among others. (Digital Currency Group Raises $600M in New Credit Facility)

Deal of the Week                          

ConsenSys is a development and investment company focused on the Ethereum blockchain. The company has raised a strategic funding round of $200 million at a $3.2 billion valuation. Investors in the strategic round include HSBC, Coinbase Ventures, ParaFi, ThirdPoint and Marshall Wallace. MetaMask’s in-app swap option has processed more than $10 billion in peer-to-peer (P2P) token swaps.

Why is this a Big Deal?

ConsenSys offers a wide array of products that include developer tools for Infura and wallet browser extension MetaMask, which has recently hit 21 million active users. The digital assets wallet had 5 million users in April, but the massive growth in the entire crypto market in the second half of the year, along with wider adoption of non-fungible tokens (NFTs), decentralized finance (DeFi), and blockchain gaming has helped the wallet grow its userbase over 400% in just six months. MetaMask was recently integrated by three crypto-focused custodians, BitGo, Qredo and Cactus Custody, as the push to integrate more institutional capital continues. Earlier in the year, ConcenSys raised $65 million from Mastercard and JP Morgan. More and more traditional financial institutions are entering the digital assets space whether they are starting to offer their own products or via investments in crypto-native companies such as ConsenSys. (ConsenSys closes $200 million raises at $3.2 billion valuation)