Tech investors pour millions into NFT startups as crypto collectibles boom

Non-fungible tokens (NFTs) are the latest crypto craze. Celebrities and artists around the world are riding the NFT hype and cashing in millions of dollars as the crypto-collectibles craze sweep through the art world.

So, what exactly are NFTs? As we previously noted, NFT (non-fungible token) is a type of cryptographic token on a blockchain network that represents a unique digital asset. This asset can either be entirely digital assets or tokenized versions of real-world assets. Because NFTs are not interchangeable with each other, they may function as proof of authenticity and ownership within the digital realm, for example as proof of the authenticity of rare art.

NFTs exploded onto mainstream public consciousness about two weeks ago when Christie’s Auction sold digital artist Beeple’s NFT for a record-setting $69.3 million, making it the most expensive digital art ever sold. The digital art was reportedly sold to a crypto investor known only as Metakovan. As artists and celebrities continue to enjoy their overnight success, tech investors also want a piece of the action.

According to a report from CNBC, venture capitalists are writing big checks for tech startups in the booming NFT space. In 2020, the total investments in NFT startups quadrupled to $250 million, according to data from Nonfungible.com, while in the past month alone overall NFT sales volumes exceeded $220 million.

So, which startups are the biggest beneficiaries?

The largest beneficiary is Sorare, a Paris-based blockchain startup that recently raised about $50 million in February from VC heavyweights like Benchmark and Accel, as well as soccer star Rio Ferdinand. Founded just three years ago by Adrien Montfort and Nicolas Julia, Sorare is a global fantasy football game where players can buy, trade, and play with official digital cards.

Since its inception in 2018, Sorare has raised a total of $59.2M in funding over 3 rounds. Its latest funding was raised on Feb 25, 2021, from a Series A round. Sorare is funded by 20 investors. Benchmark and Accel are the most recent investors.

“It’s one of the most exciting developments we’ve seen in crypto for years,” Andrei Brasoveanu, a general partner at Accel, told CNBC. “It’s one of those developments that has mass-market appeal and could potentially impact a world outside the crypto niche.”

The second biggest beneficiary this year was in OpenSea, an NFT marketplace, which raised $23 million in a round led by Andreessen Horowitz last week. OpenSea has been in operations since 2017 before the recent NFT craze. The startup claims to be the largest NFT marketplace where anyone can buy, sell, and discover rare digital items. It’s a peer-to-peer marketplace for crypto collectibles and non-fungible tokens.

In December 208, OpenSea acquired Atomic Bazaar to expand its footprint. OpenSea has raised a total of $27.2M in funding over 4 rounds. Its latest funding was raised on Mar 18, 2021, from a Series A round. The startup is funded by 36 investors including recent investors André Allen Anjos and Linda Xie.

Below is a table of the major NFT deals in 2021 so far.