Investors bet big on exchanges and GameFi

Key Takeaways

• Investors bet big on crypto exchanges, allocating almost $345 million to deals this week
  
• Deal of the Week: Sky Mavis, creator of Axie Infinity raised $152 million at $3 billion valuation
  
• Active investors this week include Paradigm, MultiCoin, Digital Galaxy and Accel

Venture Capital Deals

BitOasis is one of the oldest crypto exchanges in the Middle East and North African (“MENA”) region. BitOasis, received regulatory approvals from the Abu Dhabi Global Market earlier this year. The Dubai-based crypto exchange closed a $30 million Series B funding round. The investment was co-led by Jump Capital and Wamda. New investors in the Series B include Alameda Research and existing stakeholders include Digital Currency Group, NXMH and Pantera Capital. According to World Bank data, the total population in the MENA region was 465 million habitants in 2020. Crypto trading services in the region could provide a lot of new income opportunities. (UAE crypto exchange BitOasis raises $30 million to expand in MENA).

Easy Crypto, the New Zealand cryptocurrency exchange with a customer base of more than 150,000 across New Zealand, Australia, South Africa and Brazil has raised $11.75 million in a Series A funding round. The exchange allows clients to buy and sell over 150 digital assets. Additionally, it sells a range of hardware wallets from Trezor and Ledger. Venture capital fund Nuance Connected Capital led the Series A round. Other investors include KiwiSaver, Pathfinder, Icehouse Ventures, Even Capital, GDP Venture, Hutt Capital and Seven Peaks Ventures. Most popular cryptocurrency exchanges in New Zealand include Swyftx, Independent Reserve and Easy Crypto. (New Zealand’s Easy Crypto raises $11.75 million eyes stock market float).

CoinSwitch Kuber, India’s largest cryptocurrency exchange with 10 million users as of 3Q 2021 raised $260 million at a valuation of $1.9 billion. The funding round was led by Coinbase Ventures and Andreessen Horowitz. Previous investors like Sequoia, Paradigm, Ribbit, and Tiger Global also participated in the funding round. CoinSwitch’s closest competitors in India include cryptocurrency exchanges like WazirX and CoinDCX. CoinSwitch has raised $40 million in funding in 2021. (CoinSwitch Kuber turns unicorn, raises $260 million from Coinbase Ventures, a16z).

Art Blocks, is an Ethereum-based non-fungible tokens (“NFTs”) project that generates original digital artwork pieces on the blockchain via an algorithm. The Company has raised $6 million from True Ventures and Galaxy Digital. Existing investors are Libertus Capital and the crypto investment communities Flamingo DAO and The LAO.

NFT’s have been one of the hottest topics and investments in 2021. Sales volumes of NFTs reached $10.7 billion during 3Q 2021, up more than eightfold from 2Q 2021. (Art Blocks Raises $6 Million from True Ventures, Galaxy on Strength of Generative NFTs).

Ojamu uses a predictive artificial intelligence (“AI”) engine to analyze data from hundreds of millions of data points to automate marketing solutions based on real-time data. Ojamu has raised $1.7 million in an oversubscribed private sale that included strategic partners Ascensive Assets, Master Ventures, Moonrock Capital, Morningstar Ventures and others. The AI marketing market has grown significantly in the last few years, impacting everything from HR to customer service. Chief Marketing Officers of larger corporations have increased their AI marketing budgets to be able to personalize and respond to the changing needs of clients around the globe. (Ojamu raises $1.7 million to disrupt marketing with blockchain and AI).

Ramp is an “on-and-off ramp” platform that helps customers move fiat money into crypto-assets and vice-versa. The Warsaw-based crypto startup has closed a $30 million Series A fundraise led by British venture capital firm Balderton Capital. Earlier this year, Ramp raised $9 million in a seed funding round led by VC fund NfX and Galaxy Digital. On-and-off ramps have played a crucial role in the latest wave of adoption as investor demand has grown and with that, the need for platforms that allow fiat to be converted into cryptocurrencies and vice-versa. Popular on-off-ramps include Voyager, eToro, Coinbase, Gemini, Coinlist, amongst many others. (Warsaw-based crypto startup Ramp hits $300 million valuation in Series A raise).

Token Sales

Strips Finance, will launch a decentralized exchange (“DEX”) to trade interest rates through a derivatives instrument called interest rate swaps. The Company has raised $8.5 million in a private token sale round. Multicoin Capital led the round, with Sequoia Capital India, Fabric Ventures, and Morningstar Capital also participating. The exchange is expected to launch in November and is being built on the Ethereum scaling solution Arbitrum. Strips Finance has raised a total of $11 million in funding during 2021. After the Chinese crackdown on cryptocurrency exchanges, DEXs have become more popular and have seen an increase in daily trading volumes. (DeFi project Strip Finance raises $8.5 million to launch interest rates trading platform).

Idexo, is an NFT-centric product that is focused on building no-code digital collectibles management systems. Idexo has raised $3.35 million through its token sales. Idexo’s cross-chain NFT API offers lots of opportunities for application and game developers. As play-to-earn gaming has become a prominent trend, the API can make it easier to integrate NFTs or non-fungible token features into an application or game.

The Play-to-Earn business model is the latest development in the gaming industry. It’s a business model that embraces the concept of an open economy and provides financial benefits to all players who add value by contributing to the game world. (Idexo raises $3.35 million in token sales before launch, USDT-rewarding staking pool launches October 5).

THORSwap is a cross-chain decentralized exchange (“DEX”) built on ThorChain. The DEX has raised $3.75 million in a private token sale round. IDEO CoLab Ventures led the round, with True Ventures, Sanctor Capital, THORChain, Nine Realms, Proof Group, 0xVentures, Qi Capital, and others participating. Multi-Chain decentralized finance (“DeFi”) has been a hot topic for investors in the crypto and blockchain space. Unlocking cross-chain liquidity is a critical piece for the evolution of DeFi. (ThorChain-based DEX ThorSwap raises $3.75 million in a private token sale).

New Venture Funds

Arca, the cryptocurrency investment firm has closed a $30 million venture fund as it crosses $500 million in AUM. The fund will back companies in the non-fungible token market as well as companies operating in blockchain-based gaming and Web 3.0.
Galaxy Digital’s Vision Hill unit is backing the fund as an anchor investor. The new fund joins Arca’s flagship hedge fund, Digital Assets Fund and Digital Yield Fund. (Arca’s First Early-Stage Venture Fund, Endeavor, Closes its Oversubscribed Round Over $30 million).

Venture Capital firm NFX has created a new $450 million Seed Fund. The fund, dubbed Fund III, will specialize in fintech, marketplaces, gaming, and proptech sectors, and increase investment in tech-bio and crypto. NFX invests in businesses driven by network effects and manages $875 million in total assets. More traditional venture capital funds have shown interest to venture into the cryptocurrency and blockchain space and we expect more funds to deploy capital in the growing space. (NFX Launches $450 million Pre-seed and Seed Fund).

The foundation of DeSo, the blockchain started by the founder of social media site BitClout, has unveiled a $50 million fund to support the development of a decentralized social media ecosystem. The DeSo Foundation’s $50 million Octane Fund will help accelerate the growth of the DeSo developer ecosystem. It will draw from the $200 million in venture capital the project has received from Andreessen Horowitz, Coinbase Ventures and others. The fund will focus on early-stage initiatives that will then build a demo on the DeSo blockchain or integrate DeSo features into an existing product. (DeSo Launches $50 million Fund for Decentralized Social Ecosystem).

Deal of the Week

Sky Mavis, the creator of Axie Infinity has raised $152 million at a nearly $3 billion valuation to help grow its “play-to-earn” game that monetized via nonfungible tokens (NFTs). The fundraise was led by a16z, with contributions from Paradigm, Accel, Standard Crypto, as well as Fabric Ventures and Samsung Next among other notable backers.

Why is this a Big Deal?

COVID-19 pandemic changed the lives millions of people. The pandemic forced businesses to shut down and millions of workers lost their jobs. Axie Infinity, is a blockchain-based game where players buy, breed, and pit monsters called Axies against each other to win in-game currency. The digital currency players earn can be converted into fiat. This revolutionary play-to-earn business model has helped millions of jobless people earn a living in emerging economies around the world, specially in the Asia Pacific region. In August 2021, the game made $364 million in protocol revenues, up from $196 million in July. Axie Infinity ranked ahead of leading crypto projects including OpenSea, Uniswap and AAVE. . (Sky Mavis raises $152M at nearly $3B valuation for Axie Infinitie play-to-earn NFT game).