Venture capitalists continue to invest millions of dollars in the NFT space
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2021 was the year when non-fungible tokens (NFTs) became mainstream. Globally, interest in the digital asset class surged among individual investors as well as venture capital firms, which were looking to leverage the growing popularity of the sector to make big returns with NFTs. However, the downturn in the crypto industry affected the growth of the NFT market in 2022. With the interest among people declining and the subsequent dropdown in the value of famous NFT collections, such as Bored Ape Yacht Club, the NFT industry lost its steam.
However, as the crypto and stock market continue to underperform, venture capital firms have continued to invest millions of dollars in the NFT space as they bet on the long-term potential of the industry. Despite the downfall in consumer sentiment in NFT, investment figures have remained well-positioned in 2022, thereby highlighting the growing maturity of the NFT market. Notably, a number of players worldwide have continued to raise a funding round in H1 2022. Some of these investment rounds raised by the firms have been quite big. For instance,
- In January 2022, OpenSea, one of the leading NFT marketplaces, announced that the firm had raised US$300 million in its Series C funding round, which was led by Paradigm and Coatue Management. The investment round valued the firm at US$13.3 billion just four years after its launch.
- In January 2022, Autograph, an NFT platform co-founded by Tom Brady, announced that it had raised US$170 million in a Series B funding round, which was led by Andreessen Horowitz (a16z) and Kleiner Perkins. Notably, the NFT platform brings together celebrities and brands around digital collectibles.
The trend of raising big rounds from venture capital firms has further continued in Q2 2022 as well. For instance,
- In June 2022, Magic Eden, the NFT marketplace, announced that the firm had raised US$130 million in a Series B round, which was led by Electric Capital and Greylock. Other investors, such as Paradigm, Lightspeed Ventures, and Sequoia Capital, also participated in the Series B investment round.
- Notably, the marketplace which allows users to create, buy, and sell NFTs was launched in 2021. The Series B round raised in June 2022 has brought its valuation to US$1.6 billion. Before the US$130 million investment round, the firm also raised US$27 million in a Series A round in March 2022.
- In May 2022, Zora, another NFT marketplace, announced that the firm had raised US$50 million in a funding round, which was led by Haun Ventures. Notably, the Zora marketplace is built on the Ethereum blockchain. Consequently, creators can build directly on the platform. This makes Zora NFTs easily tradeable on other marketplaces.
Along with these large funding rounds raised by NFT-focused firms, several startups have also announced an investment from venture capital firms in H1 2022. For instance,
- In July 2022, Artfi, an NFT marketplace focused on fine arts, announced that the startup had raised US$3.26 million in a funding round led by private investors. The firm is planning to use the investment to expand the team and build the NFT marketplace.
- In June 2022, Floor, an NFT app, announced that the firm had raised US$8 million in a Series A funding round, which was led by 6th Man Ventures. Notably, Floor provides NFT portfolio tracking, live activity for collections, real-time price alerts, and multi-wallet support.
- In May 2022, Ayoken, an NFT marketplace for creatives, announced that the startup had raised US$1.4 million in a pre-Seed funding round. The NFT marketplace, Ayokenlabs, features NFTs from sports brands, musicians, and influencers worldwide.
- In April 2022, Revise, an NFT startup, announced that the firm had raised US$3.5 million from Alpha Wave Global, a United States-based venture capital firm. The firm is planning to use the fresh capital for expansion.
- Apart from all these NFT startups, several others have raised investment rounds from venture capital firms in 2022. This includes Astaria raising a US$8 million seed funding round from venture capital firms such as True Ventures, Ethereal Ventures, and Arrington Capital. Outland, another NFT startup, raised US$5 million in seed funding for its NFT art platform.
The growing interest from venture capital firms in the global NFT market indicates that they believe in the future of NFTs, and the sector will become more valuable as people begin to spend more time on the new version of the internet. Notably, as more and more innovative startups continue to enter the global NFT landscape, TechInsight360 expects the trend to continue further over the next three to four years.
To know more and gain a deeper understanding of the global NFT market, click here.
