Despite gloomy market conditions in recent months, Non-Fungible Token (NFT) and blockchain-based gaming firms are continuing to attract the interest of institutional investors. In August 2022, these firms witnessed a 66% jump in Venture Capital (VC) funding, touching $842 million. The number of VC deals in the space has shot up to 53, according to The Block Research.
The most notable recent deals involved mobile gaming firm Limit Break, NFT group Proof Collective, and metaverse avatar creator firm Ready Player Me. Limit Break raised $200 million, Proof Collective managed a16z funding of $50 million, and Ready Player Me garnered $56 million.
The success of NFT and blockchain-specific gaming firms is surprising because the overall funding in the crypto space has declined for the fourth month in a row. NFT and gaming firms are the ones to recover.
Advancements in technology, infrastructure and throughputs for L1s and L2s help increase the odds of success for blockchain-based gaming projects, The Block Research analyst John Dantoni explained.
Commenting on the funding pattern by VCs, Dantoni said an NFT marketplace has to face less regulatory risk compared to a non-decentralized financial institution.
September follows suit
The funding spree continues in September with a total VC funding of $500 million awarded to various crypto startups last week. Of the total funding, more than half went to the metaverse and Web3 gaming platforms, dominating the funding rounds.
Web 3.0 startup Animoca Brands raised funds worth $100 million from Singapore state-owned Temasek, Boyu Capital, and GGV Capital.
Mysten Labs, another San Francisco-based Web3 startup raised $300 million from FTX, a16z, Jump Crypto, and Apollo.
Recently, blockchain platform Near Protocol’s parent organization, Near Foundation also made its debut with VC funds worth $100 million. It will invest the funds into Web 3.0 and entertainment projects.