Top 10 VC Firms Investing in NFTs
Non-fungible tokens or NFTs started gaining popularity through niche circles of blockchain and crypto enthusiasts over a handful of years ago. However, it wasn’t until Christie’s auction house sale of “The First 5,000 Days” in March 2021 that the art concept produced on the blockchain exploded onto the mainstream. The digital asset, the first of its kind to be purchased at auction, is a collage of images created by Michael Winkelmann, known professionally as Beeple, which sold for $69.3 million.
Concurrent with this rise were two of the largest venture capital companies in the world, Andreessen Horowitz and Paradigm (Crypto Fund), last year. leading investors in the NFT area. And they are far from alone in betting on the hyped digital assets – fund managers and VC firms have followed suit in building out NFT strategies and investment frameworks. According to data tracked in the PitchBook platform, as of October 13, global capital invested in NFTs increased to $5.7 billion across 1,071 deals.
What are NFTs?
- At their most basic level, NFTs is represented as a unit of data in the form of a digital receipt on the blockchain
- NFT applications range from video clips to photographs and include digital art, games and collectibles such as CryptoKitties and CyberPunks
- All digital assets are created with a smart contract that cannot be copied or destroyed and are traded with cryptocurrency
- Every transaction is tracked and confirmed by the blockchain’s computer network and made visible to everyone
How do NFTs work?
Alongside accessibility to a wider market and greater control over their work, verifiable authenticity is a key driver for NFT artists and creators. The traditional route to selling art involves networking with a gallery or auction house. But by cutting out the middleman, the artist can connect directly with the audience and receive a more substantial payout for their work. Through terms pre-established by a smart contract, the creator sets a percentage of the royalties earned on each sale in perpetuity.
Create your own NFT
Try your hand at embossing an original NFT with our interactive art board below. If you were an artist with a screaming fan base, after completion you could use any krytpocurrency facilitator like OpenSea to sell the final product.
Top 10 VC Firms Investing in NFTs by Number of Deals (2021-Present)
Below, we look at leading NFT VC investors from 2021 to today, as of September 16, 2022. The number of NFT investments represents deals for each firm per data obtained from the PitchBook platform, during the same period, either after follow-on or new investments.
Animoca brands
- NFT investments: 93
- Headquarters: Hong Kong, China
Animoca Brands is a venture capital and software gaming company that develops digital property rights for players via NFTs and games to build the open metaverse. The company leverages the blockchain to create and market a portfolio of mobile applications and products oriented towards educational learning, ensuring transparency and security.
On September 9, the company received $110 million in development capital in a deal led by Temasek Holdings, Boyu Capital, GGV Capital and other investors. They plan to use the funds for acquisitions, investments and “popular intellectual property” to further push the metaverse into public view.
AU21 Capital
- NFT investments: 63
- Headquarters: San Francisco, CA
Founded in 2017, AU21 Capital is a venture capital firm looking to invest in companies operating in the blockchain and artificial intelligence sectors. In February 2022, the hedge fund announced its investment in Sidus Heroes, an NFT-centric monetization MMORPG, revolutionizing the decentralized gaming industry with its metaverse-centric gameplay that evolves the traditional play-to-earn model.
Shima capital
- NFT investments: 60
- Headquarters: San Francisco, CA
Shima Capital invests in cryptocurrency and blockchain startups. On September 14, in a seed round led by Framework Ventures and seven other investors, Shima invested $7 million in ThirdWave Systems, a developer of a blockchain discovery engine intended to connect people with games, projects and communities. The company’s technology empowers blockchain projects with analytics that enable businesses to find and retain their best customers.
NGC Ventures
- NFT investments: 46
- Headquarters: Singapore, Singapore
NGC Ventures, established in 2017, is a venture capital firm that invests in the blockchain and financial technology sectors. On September 6, the company raised an undisclosed amount of seed funding to PANONY, a provider of blockchain consulting services, localization of knowledge and appropriate access to global market resources. The fund will expand PANONY’s presence to other jurisdictions and launch new service offerings and networking opportunities.
Sfermion
- NFT investments: 44
- Headquarters: Chicago, Illinois
Sfermion invests in early-stage blockchain sectors and direct non-fungible token investments that support the emergence of the metaverse. In August, the venture capital firm participated in a $3.55 million seed funding round for Quivr, a developer of a decentralized social platform that gives individuals access to their true digital identity via identification and authentication. The funding round was led by Infinity Ventures Crypto, with participation from C2 Ventures, Liqing Zeng, FBG Capital and other undisclosed investors.
Exnetwork Capital
- NFT investments: 44
- Headquarters: Philippines
Exnetwork Capital is a hyper-connected fund, accelerator and incubator firm based in the Philippines that prefers to invest in the cryptocurrency and blockchain sectors. In July, Exnetwork and 38 other investors led by True Global Ventures participated in a Series A venture funding round for a deal for blockchain gaming launchpad developer Enjinstarter. The company, which facilitates a marketplace that enables game developers to build digital asset strategies, will use the funding to expand the company’s verticals, including Game Publishing and Metaverse Innovation Consulting.
Magnus Capital
- NFT Investments: 41
- Headquarters: Amsterdam
Magnus Capital is a VC firm and incubator based in Amsterdam and focuses on cryptocurrency investments. Last month, the firm participated in a funding round that raised $3 million in capital for EUA-based metaverse startup MetaFi. Founded earlier this year, MetaFi offers a suite of services for NFTs, metaverse and gaming finance that utilize essential tools and infrastructure for blockchain project owners and traders.
Genesis Block Ventures
NFT Investments: 41
Headquarters: Cayman Islands
Established in 2020, Genesis Block Ventures invests in seed-stage, early-stage and later-stage companies operating in blockchain sectors. On September 1, Genesis completed an undisclosed early stage venture funding round for Beoble, a developer of a Web3 social module designed to integrate social features like instant messaging and feed publishing into their services, all within minutes – regardless of which web. 3.0 service and chain are used.
HG Ventures
NFT investments: 40
Headquarters: Seoul, South Korea
HG Ventures invests in seed stage, early stage and later stage blockchain technology companies. In August, the company, along with four other co-investors, raised $291,000 in venture funding for Portal, an operator of a decentralized platform for secure bitcoin trading. The portal allows traders to execute fast trades with the privacy of underlying blockchains.
ZBS Capital
NFT Investments: 37
HQ: Kyiv, Ukraine
Since 2017, ZBS Capital has invested in the blockchain, marketing and finance sectors. In May of this year, the VC firm invested a $1.1 million seed funding round in MeMusic, operator of a blockchain-based platform that allows artists, users and companies to participate in transparent payouts.
How are NFTs and Web3 interconnected?
NFT’s association with the emergence of Web3, the third iteration of the World Wide Web, built on the blockchain and based on security and data decentralization, has fueled optimism for digital assets and art among investors and artists. Web3 will enhance and support the use of cryptocurrencies, decentralized finance (DeFi), NFTs and token-based financial exchanges.
According to PitchBook’s Q1 2022 Emerging Tech Indicator, a report that tracks promising technologies and companies receiving early-stage VC funding, Web3 and DeFi deals are among some of the quarter’s top performers.
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