Zebedee raises $35 million to power blockchain payments in virtual worlds and games
Zebedee Inc. said today it has raised $35 million in new funding led by Kingsway Capital to expand its bitcoin-powered payments ecosystem for developers to add “programmable money” to games and virtual worlds.
Using Zebedee’s platform, any developer can add cryptocurrency micropayments to their games with low transaction speeds and extremely low fees.
The Series B round was joined by global merchant bank Raine Group as well as Square Enix, developer of the critically acclaimed video game “Final Fantasy 14 Online”, along with existing investors Lakestar and Initial Capital. This funding brings the total capital raised by Zebedee to approximately $50 million since it was founded in 2019.
“This funding round gives us the opportunity to meet our very ambitious roadmap both in terms of building out our infrastructure to support the hundreds of millions of users who play our partners’ games, as well as hiring the top-level talent needed to ensure that all of our partners have best possible experience working with Zebedee,” said CEO Simon Cowell.
The concept of “programmable money” here means that the developers of games and virtual worlds can program it to incentivize gaming by triggering micropayments. This way players can enjoy the world by participating in it instead of collecting and trading gold, trinkets, creatures or lands. This way, developers will be able to reward players for simply playing the game.
Triggers can include events such as exploring new areas of a map in a virtual world, meeting and talking with new friends, collecting points in a competitive player-versus-player game, or capturing pieces in a game of chess. All of these are small game-triggering events that will normally provide experience or progress to a player’s status during gameplay, which can also provide a small type of incentive that developers can use to increase player retention.
“In Zebedee, we see a world-class team that has created a truly powerful use case for cryptocurrency in games,” said Kenny Lee, vice president of Raine Group. “We’ve seen new methods of monetization disrupt the gaming industry in the past, and we believe integrating bitcoin directly into games is a new way to expand the connection with players and engage them in ways never before possible.”
On the infrastructure side, Zebedee uses the Bitcoin Lightning Network, which is a layer on top of bitcoin that makes instant and low-fee transfers possible. Otherwise, bitcoin payments have high fees that will make micropayments impossible and can take minutes to process.
The company went with the Bitcoin protocol because it is the most stable and reliable for building infrastructure, and it is also the most widely used cryptocurrency in the world, André Neves, co-founder and CTO of Zebedee, told SiliconANGLE.
“This makes Bitcoin a practical choice to use as a payment system for technical, financial and user experience reasons,” Neves explained. “The Lightning Network is what helps scale the Bitcoin network and makes instant, near-free microtransactions possible.”
Using this payment method, Zebedee is able to process what it calls “nanopayments” with an average size of eight cents, and the company says its technology can support transactions as small as $0.0002.
The platform is designed to keep all this as invisible as possible to users as Zebedee focuses on being a payment service for games and virtual worlds. It focuses on providing a seamless user experience that works behind the scenes to reward users and does not require crypto expertise. For developers, the platform offers easy-to-implement application programming interfaces that abstract the payment rails and make it easy to integrate into the game world and set up “triggers” as well.
Neves added that the biggest hurdle that users face in existing games and virtual worlds to adopt crypto is the user experience. This is a problem both for bitcoin and for in-game economies as well, and it’s something that needs to be overcome to make mainstream adoption possible.
“Gamers don’t want financial incentives to interfere with the fun and immersion of playing a game,” Neves said. “Zebedee is working hard to make adding programmable money to game design easy and intuitive for game developers, so the technology can be used in more creative ways to enhance gameplay and introduce new game mechanics instead of detracting from the fun.”
With the funding in hand, Cowell said it would be used to expand the company’s infrastructure to support its growing number of gaming partners. And even though bitcoin and other cryptocurrency markets are currently in a slump, he believes the funding will also help the company weather what is being called “crypto winter.”
“We are pleased to be in a position where we can confidently scale our team and grow our business even as the macroeconomic backdrop becomes increasingly uncertain,” Cowell said.
The company currently has more than 50 employees working around the world as an entirely external team.
Zebedee has seen a banner year since its Series A round in September, with user numbers growing over 100 times, from an undisclosed base. The company also integrated with crypto payment provider MoonPay in May, introduced a way for live streamers to receive tips in bitcoin and cultivated its developer partnerships.
