Metaverse and Cybersecurity Lead the Way

Key Takeaways

• New Venture Capital funds raised an aggregate $1.9 billion this week with a metaverse and decentralized finance (DeFi) focus. Metaverse projects raised $213 million in capital, while cybersecurity firm Certik raised $80 million and Coinbase acquired cybersecurity firm Unbound for an undisclosed amount.
• Active investors this week include Alameda Research, Solana Ventures, Softbank and Coatue.
• Deal of the Week: 1inch Network raises $175 million in a strategic Series B funding round led by Amber group with participation from Jane Street VanEck, Alameda Research, Celsius, Nexo and other investors participating.

Venture Capital Deals

MetaVisa is a Layer 3 middleware protocol. The protocol is helping consumers establish and develop on-chain identity along with credit records to facilitate decentralized finance (DeFi), play-to-earn (P2E), non-fungible tokens (NFTs), and other decentralized applications (dApps) usage. Metavisa has raised $5 million in private and seed rounds from Spark Digital Capital, Sora Ventures, and Maven Capital, among other investors. Having on-chain credit history and identity will facilitate digital asset activities across sectors, and users will be rewarded based on their credit score. (MetaVisa announced $5 million of fundraising in seed and private round)

Avocado Guild is a blockchain gaming platform. The project buys in-game items to lend to players who play to earn in these ecosystems. Avocado has raised $18 million from Animoca Brands, Solana Ventures, and Three Arrows Capital, among other investors. Avocado makes it easier and more affordable for play-to-earn gamers to rent out game characters and other items in return for a share of the rewards earned by those players. (Blockchain gaming guild Avocado raises $18 million from Solana and others)

2TM Participacoes is the holding company of Brazil’s largest crypto exchange, Mercado Bitcoin. The company has raised $50 million from notable investors such as 10T Holdings, Tribe Capital, PIPO Capital, Gestão de Investimentos, among others. The funds will be used to increase product offerings and expand services to other Latin American markets such as Chile, Argentina, and Colombia. Mercado Bitcoin has over three million customers and traded over $7 billion dollars in 2021. (Brazil’s 2TM raises $50.3 million in second Series B closing)

Zepeto is a fashion metaverse ecosystem platform. Zepeto has attracted attention from global fashion brands such as Gucci, Nike,  Dior, and Ralph Lauren, who have created virtual clothing accessories and have sold on the platform. The company has raised $190 million in a strategic Series B funding round from SoftBank and other investors at a valuation above $1 billion. Globally popular K-pop groups Blackpink, ITZY, and SF9 have also held virtual events or issued metaverse-exclusive K-pop content on the platform. (Zepeto secures $190m in Series B)

Hxro is a Solana-based derivatives trading platform. The project allows users to design sophisticated trading strategies using an intuitive interface and to deploy those strategies via their products.  The company has raised $34 million in a token round with SIG DT, Jump Crypto, Alameda Research, Solana Ventures, and other investors participating in the round. Earlier this year, Hxro raised $15 million. The platform plans to support markets for the most well-known cryptocurrencies. (Hxro Raises $34M on Promise of Derivatives Trading Infrastructure for Solana)

Certik is a global blockchain security firm. The rise of decentralized finance (DeFi) has attracted many hackers into the digital assets space, increasing the risk for blockchain companies and users alike. The company has raised $80 million in a Series B2 investment round with participation from Sequoia, Tiger Global, Coatue, and GL ventures. Certik has raised more than $140 million over the past four months. The capital raised will be used to continue to build and expand on their software-as-a-service (SaaS) and product suite. Blockchain companies have become more concerned about cybersecurity and have taken it seriously to safeguard their infrastructure against potential hacker attacks. (Blockchain security firm Certik approaches unicorn status following $80M raise)

New Venture Capital Funds

Maven  11 Capital is a digital asset investment firm. The company has successfully raised a second fund at $120 million. The closed-end fund was incorporated with $40 million raised in June 2021. To date, the team has made 28 investments in decentralized finance (DeFi) protocols and Web3 applications. With the new capital raised, the team will continue to invest in DeFi and deploy capital into non-fungible token (NFT) infrastructure platforms. Maven capital has already invested in NFT platform NFTfi, a marketplace for NFT-backed loans where users can put up their NFTs as collateral to receive a loan. (Maven 11 Capital closes second crypto investment fund at $120 million)

Play Ventures is a venture capital firm dedicated to investing in the gaming space. The firm is expanding by creating a $75 million venture fund to invest in projects that merge blockchain technology and gaming. The fund has already invested in a few projects such as ReNFT, an NFT borrowing and lending protocol, as well as GuildFi, a decentralized organization providing access to play-to-earn (P2E) games. 2021 has been a year where several gaming-focused venture funds have emerged, such as Bitkrafts and Solana, among others. (SG’s Play Ventures raises $75m for blockchain gaming-focused fund)

Hivemind Capital Partners is a venture fund focusing on staking, trading, P2E gaming, and capital investments. The fund has raised $1.5 billion and will dedicate teams into specialized verticals in order to cover each aforementioned Web3.0 sectors. The company is partnering with Algorand to help their entrance into the decentralized economy and is in the process of forming partnerships with other layer-1 protocols to follow their multi-chain thesis. (Former Citi Top Trading Executive Launches Hivemind, a $1.5B Venture to Institutionalize Crypto Investing)

Hashed Venture Fund II is the second digital assets venture capital fund launched by the Hashed group. This second fund will be investing in Web3.0 startups spanning DeFi, NFTs, gaming, and the metaverse. It has raised $200 million and is expecting to have invested the entirety of its funds within two years through participation in startups’ seed and Series B funding rounds. The company’s decision was based on its optimism in Web3.0’s ability to democratize and build trust in the development of the metaverse. (South Korean crypto VC Hashed launches new $200 million fund)

Crypto Capital Markets

Unbound is a technology security company that uses multi-party computation technology. Coinbase has acquired the firm for an undisclosed amount as it continues to bolster its custody and cybersecurity abilities. Earlier this year, Coinbase was a victim of a hack where over 5,000 of its customers were targeted on a phishing scam involving SIM cards. Coinbase has been actively acquiring companies this year. Acquisitions include machine-learning startup Agara, data service provider Skew, and infrastructure provider Bison Trails. (Coinbase to Buy Crypto Security Tech Firm Unbound Security)

Grayscale is a digital asset investment management firm. Grayscale has launched a Solana trust as their latest offering product with $9.5 million under management in the trust. This was created to grant investors passive exposure to the Solana network token SOL. Solana has had an impressive year, with multiple token price increases greater than 100%, strategic partnerships, and an actively growing developer ecosystem. Solana’s derivative platforms, NFTs, and decentralized finance (DeFi) projects have had explosive community involvement, making it a popular blockchain network. (Grayscale’s Solana Trust Launched With $9.5M Under Management)

SK Square is a non-telecommunications investment subsidiary of South Korea’s largest wireless carrier SK Telecom. The company has invested $75 million in crypto exchange platform, Korbit, acquiring a 35% stake. This is the first investment into the crypto space for SK Square. The new partnership will look to promote digital assets, non-fungible tokens (NFTs) and the metaverse. Korbit’s largest shareholder is game developer Nexon’s holding company NXC, which owns a 48% stake in the platform. Korbit is one of Korea’s only four cryptocurrency exchanges that are fully compliant with the country’s latest crypto regulations, out of a total of around 30. Currently, the four are the only ones licensed to operate Korean won-to-crypto services. (SK Telecom spinoff acquires 35% stake in South Korean crypto exchange giant Korbit)

Galaxy Digital is a cryptocurrency brokerage and merchant bank. The company has announced the issuance of $500 million exchangeable senior notes. The debt is convertible into company equity and gives buyers 3% interest per year. The funds will be used to expand business operations and investments in the digital assets space. As of October, Galaxy Digital had over $3 billion in assets under management (AUM). Back in October, Galaxy raised $325 million for their Interactive Fund to invest in blockchain technologies and interactive content. (Galaxy Digital raises $500 million in convertible debt to fund business expansion)

Deal of the Week

1inch Network is the project creator for decentralized exchange (DEX) aggregator 1inch application. The platform makes decentralized transactions more efficient as it unites decentralized protocols whose synergy enables the most lucrative, fastest, and protected operations in the decentralized finance (DeFi) space. 1inch has raised $175 million Series B funding round. Amber Group led the funding round with Jane Street VanEck, Alameda Research, Celsius, Nexo, and Gemini Frontier Fund investing as well. It is also worth mentioning that this round of funding was started over 3 months ago with a target of $70 million, and that target was revised last month to $175 million and was still met.

Why is this a Big Deal?

The capital raised will help 1inch Network build products and services for institutional customers, particularly banks and hedge funds. 1inch recently launched an institutional client-focused product called 1inch Pro that provides “permission pools” where only verified participants have access, granting institutional clients access to decentralized finance (DeFi) in a secure and verifiable manner. With more demand from these prospective clients looking to get into DeFi and digital assets, 1inch hopes to be one of the main service providers that will cater to this clientele. 1inch is also planning to launch a new protocol in Q1 2022, using the 1inch token as an insurance mechanism where users can stake and cover the protocol from losses by taking risks and earning from the protocol’s fees. 1inch currently has close to 1 million users on Ethereum. More than $100 billion in crypto assets have been traded using the 1inch DEX over the last two years. (Decentralized exchange aggregator 1inch grabs $175 million in token sale)