Is Dapper Labs' $7.5 billion valuation based on "playing"?
The Block reported that according to people familiar with the matter, Dapper Labs, the development team of CryptoKitties and NBA Top Shot, is conducting a new round of financing at a valuation of over US$7.5 billion, led by Coatue Management.
It is worth mentioning that Dapper Labs has completed two rounds of financing this year, raising US$250 million and US$305 million in February and March respectively, led by Coatue Management.
Coatue Management is behind the financing of Meituan, Didi, Heytea, Guming, and Dingdong Maicai. Therefore, Dapper Labs' acquisition of Coatue Management's lead investment shows the gold content of its financing.
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In 2012, Roham, a young man from Iran, founded Axiom Zen (Dapper Labs later became independent from Axiom Zen).
At first the company was not engaged in blockchain and encryption-related businesses until Roham met Dieter Shirley in 2013.
Before entering Axiom Zen, Dieter Shirley served as the development director of Atimi Software and a senior software engineer at Apple, and is a veteran of the Internet industry. He read the "Bitcoin White Paper" in 2010 and dug up his first bitcoin on his home computer.
When Roham first met Dieter Shirley, Dieter Shirley was mining bitcoin. Through communication with Roham, he learned about the encryption industry. Since then, the company has injected the gene of blockchain, coupled with Roham's own interest in technology development, planted the seeds for the birth of CryptoKitties.
In September 2017, Dieter Shirley proposed the ERC-721 standard as the main sponsor. Two months later, the ERC-721 standard CryptoKitties came out officially, and once it went online, it caused congestion on the Ethereum network. This famous scene was also recorded in the history of Ethereum development.
In an interview with DappReview, Roham said that he had anticipated the popularity of the community before going online.
“We put a lot of effort into our initial release at EthWaterloo, and it all paid off: the community clearly loved the game at the time, gave us a lot of great feedback, and it made us excited for the launch to be successful.” confidence."
But Roham and his team quickly discovered that running CryptoKitties on the Ethereum chain was not a long-term solution. Roham personally admitted that he did not expect CryptoKitties to cause congestion on the Ethereum network. The impact of network congestion on users is intuitive, greatly reducing user experience.
In addition, the gameplay of CryptoKitties is relatively simple, and it is a relatively simple pet-raising game. Users will lose their freshness after playing for a few days. As of June 2018, CryptoKitties had fewer than 250 daily active users, a drop of more than 95% compared to the peak of around 9,750.
For project parties who want to achieve long-term development, the state of the Ethereum network at that time almost "killed" CryptoKitties.
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David Pakman, a partner at venture capital firm Venrock, once described Flow in this way: Applications such as decentralized games and encrypted collectibles have different scalability requirements for the blockchain, and sharding cannot solve this problem at all. Therefore, Dapper Labs created Flow, hoping to expand the users of decentralized games to tens of millions.
Flow is designed for high-performance Dapps and games. This is the original intention of creating the Flow public chain, and it is also the characteristic that distinguishes the Flow public chain from other public chains.
In addition to not doing sharding, Dapper Labs has built Flow into an ecosystem and built a platform for the NFT industry. Various NFT products are welcome to enter the Flow ecosystem. All the NFT forms we can see so far can appear on Flow, such as encrypted art, NFT music, etc.
Take the most recent example, on April 17, Japanese tennis star Naomi Osaka announced a partnership with the NFT platform Basis.Space to issue NFT on Flow. On April 29, Versus, an encrypted art auction platform, will launch on Flow and join the Flow ecosystem.
Flow also has strong partners. On the homepage of its official website, you can see that Flow’s partners include NBA, UFC (Ultimate Fighting Championship), Samsung, Ubisoft, the development company of “Assassin’s Creed”, Warner Music Group, etc.
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The outing of the NBA Top Shot is unexpected and reasonable.
What was unexpected was the popularity of the NBA Top Shot. A motion picture of James' dunk can fetch a price of 208,000 US dollars, and many fans lined up in the early morning to grab the bag and enjoy the fun of "unpacking". Dapper Labs put the NFT + blind box gameplay into NBA Top Shot, creating Bubble Mart in the NFT field.
According to data from CryptoSlam, the transaction volume of NBA Top Shot has reached 530 million US dollars so far, and 436,000 people own the NFT of NBA Top Shot. The second-ranked CryptoPunks had a turnover of $250 million, less than half of the NBA Top Shot.
Even with the current cooling down, NBA Top Shot weekly turnover can still reach more than $15 million.
Even Roham sighed: "Our transaction volume in the past year has been achieved in one day in the NBA Top Shot."
Why is it reasonable to say that the NBA Top Shot is out of the circle?
In addition to fan enthusiasm, NBA Top Shot has the support of the NBA and its players. Among the new round of financing list, you can see the participation of famous NBA players and owners, such as Nets star Kevin Durant and Hornets owner Michael Jordan.
Kevin Durant said: "New technology can quickly change the media and sports fans, and the NBA is an example."
In addition, Hornets player Rozier and Magic player Terrence Ross have publicly expressed their love for NBA Top Shot.
More players began to pay attention to whether their highlight moments in NBA Top Shot were expensive or worthwhile.
NBA bosses have also seen the role of blockchain technology. Mark Cuban, Tsai Chongxin and others established the NBA Blockchain Use Case Committee. NBA Top Shot is undoubtedly one of the use cases that the committee focuses on.
"We didn't focus on rushing things and copy-pasting," Roham said. We think the interest in NBA Top Shot is also because it's going to be a sustainable economy, and that's really a great thing about basketball. We hope that it can become a currency for cryptocurrency market advocates.
In addition, judging from the recent financing, Dapper Labs is trying its best to improve the user experience of NBA Top Shot, and strive to do one thing well.
Dapper Labs completed $11.4 million in financing in August last year, when it had just completed the first phase of the NBA Top Shot public beta. This financing is used for the expansion of the Flow blockchain to cope with the network traffic brought by NBA fans.
The two rounds of financing this year coincided with the popularity of NBA Top Shot. Dapper Labs used these funds to increase game features and increase the speed of user withdrawals.
This year's NFT track is booming, and the popularity of NBA Top Shot has been boosted by the overall market heat to a certain extent. It can be said that NBA Top Shot and Dapper Labs have caught up with a good time.
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"Nourishment" of Dapper Labs: a luxurious investment lineup
According to Qichacha, Dapper Labs has completed 8 rounds of financing. Participating institutions include a16z, USV, Google Ventures, ConsenSys, DCG, Venrock, etc. Investors cover sports and entertainment circles.
Counting these 8 rounds of financing, the first two rounds (Angel round and A round) were completed before Dapper Labs became independent from Axiom Zen. At the end of 2017, South Korea's Hyundai Capital announced its investment in CryptoKitties, opening the way for financing.
On March 21, 2018, Dapper Labs completed its first financing after breaking away from Axiom Zen, led by a16z and USV. This financing injected "fuel" into the development of the Flow blockchain. There was quite a stir.
On September 13, 2019, Dapper Labs announced the completion of US$11.2 million in financing, led by a16z. Investors in this round of financing include USV, DCG, Warner Music Group, Venrock and Accomplice, and the financing is used to develop Flow.
a16z and USV participated in these two rounds of financing. Although it is not fully explained in the press release, at least two points can be seen.
The first is that investment institutions have seen the vision of Flow. As a public chain that focuses on high-performance Dapps and games, it is special in the blockchain world. It solves the problem of network congestion caused by CryptoKitties and helps more NFT applications land. .
Second, based on Dapper Labs’ experience in developing CryptoKitties, it is a good choice to enter the Dapp field by investing in Dapper Labs.
The subsequent three rounds of financing were all related to the development and maintenance of NBA Top Shot, and the investment participants also expanded from investment institutions to sports and entertainment stars.
First, NBA player Ding Wengdi led a $12 million financing round for Dapper Labs in August last year. He is a supporter of cryptocurrency and has asked to exchange his salary of 34 million US dollars for 3 years into the equivalent amount of bitcoin.
The focus of investment in the sports and entertainment circles is in this round of financing completed on March 30. Many NBA stars including Jordan, Durant, Klay Thompson, Iguodala, Lowry, and McGee participated in the vote. Dreamers VC, the investment agency of Hollywood superstar Will Smith in the entertainment circle, participated in this round of financing.
With the success of the NFT craze and NBA Top Shot, NBA Top Shot can be used as a successful template to promote to other sports leagues and the entertainment industry. Roham previously stated that he is actively seeking cooperation in more fields.
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Dapper Labs: Building Blockchain Products for the Masses
Based on the powerful team IP of Dapper Labs, there was a saying in the circle that "the product produced by Dapper Labs must be a boutique!"
From Encryption Kitties to Cheese Wizard, to today’s NBA Top Shot, the rarity level setting allows players to fight for rare NFTs. For each blockchain game, Dapper Labs predicts the popularity of the game through trial play within the team, and accurately grasps the player's psychology.
Another thing worth learning is the vision of the team to convert traffic. NBA Top Shot brings real-world fans into the blockchain world, turning fans into gamers. NBA Top Shot proves the success of NFT + traffic IP at this stage.
Finally, I have to mention Dapper Labs' responsibility to users. Dapper Labs is independent so that it can focus on the development of chain games. The Flow public chain is born for chain games. Behind every financing is the optimization and upgrading of products.
"Slow is fast" is the most appropriate description for this team. There are not many products in 3 years. Each stage and each team focus on developing and maintaining a product to satisfy players.
Roham once mentioned in an interview: We have some people doing market research to verify whether these ideas have a market. There is a core group that has been working on the CryptoKitties project. Another fast-growing team is focused on Flow and NBA top shots. Some of us just do prototypes and ideas.
reference article
reference article
"Uncover the story behind "Crypto Kitty" and the killer feature of "Flow"" by DappReview
"Encrypted cats, star cards, they are the creators of "sky-high price" NFT" by DC News
