LeBron James #23 of the Los Angeles Lakers drives to the basket against the Phoenix Suns during the 2021 NBA Playoffs on June 3, 2021.
Adam Pantozzi | National Basketball Association | Getty Images
Two start-ups in the red-hot NFT market raised a combined $930 million this week, highlighting continued appetite from investors for cryptocurrency companies as the industry experiences massive growth.
Dapper Labs, which makes virtual basketball trading cards, said Wednesday it has raised $250 million in a funding round led by Coatue. Bond, the investment firm run by former Wall Street analyst Mary Meeker, and Singaporean sovereign wealth fund GIC also backed the round.
The new round values the Vancouver, Canada-based firm at $7.6 billion, according to a person familiar with the matter who preferred to remain anonymous as the information is not public.
Sorare, a French fantasy soccer game that incorporates NFTs, also announced Tuesday that it bagged $680 million in a bumper cash injection led by SoftBank. Venture capital companies Atomico, Bessemer Ventures and IVP also invested, along with investment firms D1 Capital and Eurazeo.
French soccer star Antoine Griezmann and former English player Rio Ferdinand are also investors in Sorare.
The investment gives Sorare a valuation of $4.3 billion, the company said, making it by far the most valuable private tech firm in France and one of the largest start-ups in Europe.
What are NFTs?
NFTs, or non-fungible tokens, are a new but fast-growing phenomenon in the crypto industry. They are digital tokens that represent ownership of a virtual item, such as a work of art. Ownership is tracked on the blockchain, a digital ledger of transactions.
Unlike bitcoin and other cryptocurrencies, NFTs aren’t fungible. This means they cannot be exchanged with one another like dollars or gold. Each NFT is unique and acts as a collector’s item that can’t be duplicated — however, the underlying media can still be viewed by someone else on the internet.
“When we think about the collectibles in the physical world, most of them have no utility value,” Nicolas Julia, CEO and cop-founder of Sorare, explained. “You put them in an album and that’s nice but it’s kind of limiting.”
“When you translate it to NFTs in the digital world, there’s many more things which you can do, like using them in a game for instance. But you also have provable scarcity, which is very appealing to collectors.”
Prices of NFTs spiked earlier this year, with sales reaching a record $2.5 billion in the first half of 2021. High-profile transactions include a record $69 million artwork sold by digital artist Beeple at a Christie’s auction and the $2.9 million sale of the first-ever tweet by Twitter CEO Jack Dorsey.
The huge sums of money flowing into firms like Dapper Labs and Sorare highlights how investors are chasing the next big thing in crypto.
Crypto and blockchain start-ups have received about $19 billion in venture funding so far this year, almost triple the $6.4…