The creators of three of the most well-known NFT firms on the market, Yuga Labs, has raised $450 million in funding at a $4 billion valuation, according to the firm. Bored Ape Yacht Club’s staff will use the cash to establish a media empire around NFTs, beginning with video games. The metaverse project, dubbed Otherside, is described as an MMORPG to connect the NFT universe as a whole. Wylie Aronow, a Bored Ape Yacht Club co-founder who goes by the name Gordon Goner, says the team wants to build “an interoperable world” that’s “gamified”
Last month, Yuga Labs made a significant shift in the NFT sector, acquiring CryptoPunks and Meebits from Larva Labs. The acquisition united three of the most lucrative NFT portfolios under one roof — and expanded Yuga Labs’s arsenal of intellectual property to draw on while developing its game and metaverse ideas. Last week, the firm introduced a cryptocurrency, ApeCoin, which will be regulated independently and used as the primary money in Yuga Labs’ properties.
Nicole Muniz, CEO of Yuga Labs, says that the company is collaborating with “a few different game studios” to create Otherside. The game will not be restricted to Bored Ape owners, and the company intends to create development tools that will allow NFTs from other projects to function within their setting.
Why will Otherside be different?
Other companies are going about their metaverse ideas wrong, according to Yuga Labs, giving the startup a chance to stand out. People won’t link up over spending time together in a virtual space with nothing to do, according to Greg Solano, a Yuga Labs co-founder who goes by the name Gargamel.
Instead, people connect when put into situations where they must collaborate. “In essence, we don’t think deep social experience comes from essentially a Zoom chat and walking around saying ‘hi.’” Otherside’s release is unknown. Later this year, a play-to-earn game will be released.
The funding round, which was one of the largest for an NFT business to date, was led by Andreessen Horowitz, which has a long history of investing in the Web3 sector. It previously invested in OpenSea, Dapper Labs, and Coinbase. The financing round is being joined by the game developer Animoca Brands and crypto companies Coinbase, MoonPay, and BlockStar. Chris Lyons, a general partner at Andreessen Horowitz, will join the board of Yuga Labs as a member. Last month, the Financial Times reported that funding talks had begun.
Yuga Labs success at an early stage
To date, Yuga Labs has been profitable. According to a leaked pitch deck, the firm earned $137 million last year, with an outstanding 95 percent profit margin, largely on the basis of taking a cut of transactions linked to its NFT brands. (Yuga Labs declined to comment on figures from the deck.)
But the business has only just begun. According to OpenSea’s data, NFT collections have about 40,000 users, and the firm has just released one game for a limited time. Yuga Labs is being handed hundreds of millions of dollars to establish a gaming business — or at least the Web3-ified 2022 version of one — from scratch, as a result of this arrangement.
Whether or not they succeed is an open question, but there’s no doubt that a decentralized future is coming. The firm is making the same big bet that so many others are right now: that some metaverse project will become the next major breakthrough. Now all they have to do is build it.
