Fri, November 5, 2021 | 3:57PM ET

Metaverse Funding and Acquisitions Takeoff

Name: FS Insight
Price range: $$$

FS Insight Team

Key Takeaways

Metaverse projects raised an aggregate $287 million in capital this week, payments and investment platforms raised $153 million, new venture capital funds created brought in $240 million and M&A activity reached $970 million this week.
Deal of the Week: Digital Currency Group sells shares worth $700 million to Softbank and Alphabet among other investors at $10 billion valuation
Active investors this week include SoftBank, Alameda Research, AU21 and Animoca Brands

Venture Capital Deals

Ardana is a decentralized exchange stable asset liquidity pool and on-chain asset backed stablecoin protocol built on Cardano (ADA). The platform will allow users to send, receive, store, borrow and lend the stablecoin ($dUSD). Ardana has raised $10 million from various investors such as Three Arrows Capital, Cardano’s cFund Ascensive Assets, Morningstar Ventures, Kronos, Mechanism Capital, as well as other investors. Since the Alonzo Fork, Cardano has seen an increase in developer activity on the ecosystem. (Cardano Stablecoin Protocol Ardana Toasts $10M Capital Injection Led by Three Arrows Capital and Ascensive Assets).

NFT Labs is a social-plus marketplace for officially licensed sports NFTs. The company will raise close to $1 million across seed, strategic and public rounds. NFT Labs also closed a funding round valued at over $1 million was led by Shima Capital and AU21 Capital, with Oracles Investment Group, Kangaroo Capital, BlockStart Ventures and CyberFi participating. NFT platforms have received a lot of attention from investors as the NFT and collectibles markets continues to see significant growth. (NFT Labs Raises Over $2M in Private Funding For ITSMYNE, IDO on CardStarteer Soon).

Chipper Cash is a n African cross-border payments platform. The Company has raised $150 million in a Series C extension at a $2 billion valuation. The round was led by FTX with SVB Capital, Deciens Capital, Ribbit Capital, Tribe Capital and other investors participating. Chipper operates in seven African countries and recently expanded into the United Kingdom and United States. The United States is responsible for almost 30% of the international remittances to sub-Saharan Africa (Chipper Cash gets $2B valuation with $150M extension round led by FTX).

Spruce is a decentralized identity company that allows users to control their data across the web. They offer two products, SpruceID and Kepler. SpruceID is an ecosystem of open-source tools that enable user-controlled identity anywhere. Kepler is a decentralized storage platform that allows users to share their digital credentials, private files and sensitive media to blockchain accounts. Spruce has raised $7.5 million in a funding round with investors such as Ethereal Ventures, Electrical Capital, Alameda Research, Coinbase Ventures, BitKraft, Protocol Ventures and other funds participating (Decentralized Identity Startup Spruce Raaises $7.5M).

Upland is a metaverse mobile game platform where users can buy and sell virtual land that corresponds to real-life property. The project has raised $18 million in a Series A round at a $300 million valuation. The funding round was led by Animoca Brands with participation from C3 Management, OneTeam Partners, Block.one, Alumni Ventures Blockchain Fund and Global Founders Capital. The metaverse has been a hot sector within crypto that has attracted significant capital from investors, not to forget also that Facebook has officially change its name to Meta and has dedicated $10 billion to develop products in the metaverse (Upland raises $18M at $300M valuation for NFT-based virtual real estate game).

The Sandbox is a virtual metaverse game that enables players to play, build, own and monetize their virtual experiences. The gaming platform has raised $93 million in a Series B round to grow the metaverse. The investors that participated in this round include SoftBank Vision Fund, Animoca Brands, Galaxy Intereactive, True Global Ventures, among others. The Sandbox has over 12,000 virtual landowners and more than half a million registered wallets. With the capital raised, the team plans to speed up growth of the metaverse with live performances, games and social experiences (SoftBank invests $93M in The Sandbox’s ‘metaverse’ game).

Alpaca Finance is a leverage yield farming protocol built on the Binance Smart Chain (BSC). Moving outside of traditional decentralized finance (DeFi), Alpaca has raised $3.6 million in a public sale of an NFT collection called Alpies. Alpies will have a crucial role in Alpaca’s upcoming play-to-earn gaming platform. Alpaca Finance is ranked amongst some of the top DeFi protocols with $1.3 billion in terminal value locked (TVL). Alpaca plans to merge DeFi, NFTs and gaming into their platform and grow their community (Alpaca Finance raises $3.6 million in public sale of first half of new NFT collection Alpies).

Credefi is a blend of FinTech solutions and a decentralized finance (DeFi) protocol connecting digital assets lenders with small and medium businesses (SMBs). The Company has raised $1.8 million in a private financing round. The round was led by Marshland Capital with Moonrock Capital, Varys Capital, X21 Digital, AU21, and other investors participating. Credefi will now prepare for an upcoming initial DEX offering (IDO). The platform is bridging traditional finance with DeFi and creating a channel for digital assets owners to connect with business owners seeking funding (Credefi Announces Completion of a $1.8M Private Round and Prepares for Upcoming IDO).

Mythical Games is a blockchain-based gaming studio. The Company has raised $150 million in a Series C at a $1.25 billion valuation. The round was led by a16z with Binance, FTX, D1 Capital, RedBird Capital, The Raine Group as well as other investors participating. The gaming studio has raised $225 million in 2021. The platform’s play-to-earn technology platform will be licensed in order to help gaming companies create their own games with playable NFT character (Mythical raises $150M at $1.25B valuation for playable NFT game platform).

Torum is a Web 3.0 SocialFi metaverse ecosystem seeking to connect digital asset users and projects. The social media platform has over 120,000 users and has an integrated yield farming platform, an NFT marketplace and an avatar NFT. Torum has raised a strategic investment round from Huobi Ventures, KuCoin and other venture capital funds (KuCoin Labs invests in Huobi-backed SocialFi platform to expand into Metaverse).

AscendEX is a global digital assets financial platform that provides users with spot, margin and futures trading for over 200 blockchain projects. The Company has announced a $50 million Series B round led by Polychain Capital and Hack VC. Additional investors include Alameda Research, Jump Capital and other investors. The team at AscendEX has a dedicated team that provides consultation on token economic design, secondary market liquidity strategies, staking support, liquidity mining, as well as other business development services (AscendEX announces a $50mm series B raise led by Polychain capital and Hack VC).

Star Sharks is a gaming NFT platform on the metaverse that enables players to compete for rewards by trading and mating their pet sharks. Binance Labs, Binance’s venture capital arm has placed a strategic investment of almost $1 million as the exchange bets on NFT gaming built on the Binance Smart Chain (BSC). Recently, Binance launched a $1 billion fund to spur ecosystem growth and attract new projects (Binance bets on a gaming NFT metaverse where players can mate their pet sharks).

Faraway is a gaming studio that leverages blockchain technology to create decentralized gaming platforms where players can earn-to-play (P2E) in the metaverse. Fairway has raised $21 million in a Series A round from strategic investors to expand player-driven economies in their platform. FTX and Lightspeed Venture Partners led the funding round with a16z, Sequoia Capital, Pantera Capital, Jump Capital and Solana participating as well. Metaverse gaming has become the latest trend in the industry and investors are betting big on this blockchain sector (Faraway raises $21M to make social games with player-driven economies).

Bamboo is a micro-investing application that allows users to buy small amounts of digital assets by rounding up to the next dollar on each purchase and using the difference to buy any of the digital assets offered on the platform. The Company has raised $3 million in a Series A round with participation from Orthogonal Trading, Mountain Ash Investment Management and VP Capital. The Company might prepare to expand operations into the United States (Aussie crypto micro-investment app Bamboo raises $3M, eyes US market).

New Venture Capital Funds

Sanctor Capital is a crypto-focus fund that deploys capital across both primary and secondary markets. Sanctor has just raised $20 million for its inaugural fund that will focus on decentralized finance (DeFi), online games (GameFi) and cross-chain infrastructure projects. Sanctor Capital has an in-house mentorship program called Turbo where founders work with domain experts and entrepreneurs to launch products and develop growth strategies. Sanctor Capital co-led the $4.2 million funding round for Synchrony, a Solana-based on-chain asset management protocol (Sanctor Capital completes $20 million raise to support ‘bright minds’ in crypto).

Sfermion is a metaverse-native fund that invests in esoteric digital assets. The firm has raised $100 million for their second fund that will focus on investing on three verticals, early-stage venture equity, tokens and direct NFTs. The new fund has the backing from top investors such as Alan Howard, the Winklevoss brothers, Matthew Roszak and Chris Dixon. The Metaverse space has seen significant growth and more projects in the space continue to gain traction such as The Sandbox, Gala Games, and NFT platforms. We are confident that more projects and companies will continue to enter the Metaverse. (Sfermion Celebrates $100M NFT Fund, Counts Andreessen, Winklevoss Twins Among Investors Driving Metaverse Growth).

Enjin is an Ethereum-based ecosystem that facilitates the creation and commercialization of non-fungible tokens (NFTs) for individuals, businesses and brands. Enjin has created a $100 million fund (Efinity Metaverse Fund) dedicated to grow their ecosystem. The fund will focus on cross-chain NFT assets, digital collectible applications, gaming, virtual events and building multichain infrastructure. With more companies that continue to build on the metaverse, platforms that provide the tools to create and monetize NFTs will be more popular (Enjin Allocates $100M to fund Metaverse).

Crypto Capital Markets

NYDIG is a digital assets company that offers private funds, managed accounts and investment strategies for financial institutions, corporations and high net worth investors. The Company has acquired U.K.-based payments company Bottlepay in a deal worth $280 to $300 million in stock. Bottlepay’s global payments are powered by Bitcoin’s Lighting Network and allows users to send funds via messages on Twitter, Reddit and Discord. NYDIG too has been busy making acquisitions, some of the Company’s latest acquisitions include Arctos Capital and Digital Assets Data (NYDIG acquires British bitcoin startup Bottlepay in $300 million stock purchase).

Siam Commercial Bank (SCB) is one of the largest banks in Thailand. Through its subsidiary Siam Commercial Securities Company Ltd. (SCBS), the bank is taking a 51% stake in cryptocurrency exchange Bitkub worth $536 million. The deal is expected to close in 1Q2022, pending approval from the Bank of Thailand and the Securities Exchange Commission. Financial institutions in Thailand have been making inroads into digital assets. In August, Bank of Ayudhya participated in a $41 million investment round for Thai-based crypto exchange Zipmex and Kasikornbank rolled out a service for digital token offerings (One of Thailand’s largest banks is getting into cryptocurrency by buying the country’s biggest crypto exchange).

Celsius is a centralized platform focused on crypto lending, borrowing, earning and purchasing digital assets. Celsius has acquired high-security custodian GK8 for $115 million. GK8 is an all-in-one custody platform for banks and financial institutions. This acquisition makes Celsius the only end-to-end platform that combines offline cold vault with keyless multi-party computation (MPC) currently. Last month, Celsius raised $400 million from investors at a $3 billion valuation. The acquisition comes at a time where several state regulators have launched inquiries into the platform (Lending network Celsius acquires crypto custody firm GK8 for $115 million).

Rhodium Enterprises is a fully integrated bitcoin mining company using liquid-cooled infrastructure to mine BTC. The Company has filled with the Securities and Exchange Commission (SEC) to raise up to $100 million in an initial public offering (IPO). Rhodium plans to list on the NASDAQ under the ticker RHDM. The one-year-old company has 80MW capacity to run over 22,000 Bitcoin mining machines. The Company plans to add 45MW additional power and grow its hashrate. Additionally, Rhodium will launch a second Texas facility by April 2022 and has purchased additional Bitcoin miners that are expected to be delivered the same month (Bitcoin mining firm Rhodium plans to raise funds via IPO and open 2^nd crypto mining facility by 2022).

Coinbase is a digital assets exchange that allows users to buy, sell, convert and store cryptocurrencies. The first crypto exchange to go public has just acquired a machine learning startup Agara for over $40 million. The Agara platform offers which is based in India goes in line with Coinbase’s strategy to continue to build out a tech hub in India. Coinbase has been active in the acquisition space, this year the Company has acquired Zabo, Bison Trails and Skew (Coinbase Acquired Machine Learning Startup Agara for Over $40M).

Deal of the Week

Digital Currency Group (DCG) is a corporate venture capital firm that invests, builds and supports Bitcoin and blockchain companies The Company has sold $700 million shares at a more than $10 billion valuation. SoftBank led the secondary sale with Ribbit Capital, CapitalG and GIC participating in the deal.

Why is this a Big Deal ?

The Digital Currency Group has over 200 portfolio companies and more than 1,000 employees across its subsidiaries. Grayscale, one of DCG’s subsidiaries is the world’s largest digital asset managers with over $50 billion in assets under management (AUM). Other notable companies under the DCG umbrella include news outlet CoinDesk, primer brokerage and institutional lending firm Genesis, U.K.-based crypto exchange Luno, among other top profile companies.

With latest valuation, DCG is one of the most valuable privately held companies in the digital assets and blockchain space. The backing from major investors such as SoftBank, Ribbit Capital and Capital G, a subsidiary of Google’s parent company (Alphabet) will give DCG more access to partnerships, investments and will be able to leverage investors’ network (Grayscale-parent Digital Currency Group tops $10 billion valuation with SoftBank, Alphabet investments).

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