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Mythical Games raises $75M to build an NFT game engine
Even as NFT sales dip below their most speculative highs, startups aiming to tap into their potential are still scoring big funding rounds from investors who believe there’s much more to crypto collectibles than the past few months of hype.
Mythical Games, an NFT games startup based out of Los Angeles, has banked a $75 million raise from new and existing investors betting on the startup’s aim to expand the ambitions of their first title and locate a substantial platform opportunity amid helping developers build blockchain-based gaming experiences.
The round was led by WestCap. Existing investors were joined by 01 Advisors and Gary Vaynerchuk’s VaynerFund in the Series B funding. The startup has raised a whopping $120 million to date.
The company has been building a title called Blankos Block Party that seems to be Fall Guys meets Roblox meets Funko Pop. The PC game capitalizes on a number of big social gaming trends around user-created content, while adding in a marketplace where users can buy avatar figures and accessories crafted by a variety of artists and designers that Mythical has partnered with. Users can buy or sell the limited run or open edition items through their marketplace. Unlike some other NFT platforms, the goods live on a private blockchain so they can’t be re-sold on public marketplace platforms like OpenSea.
Mythical Games is part of a growing movement to bring blockchain-based game mechanics mainstream while leaving behind elements of crypto platforms that are seen as less ready for primetime. Users can purchase avatars on the platform with cryptocurrency through BitPay but they can also pay with a credit card. Users don’t need to walk through the mechanics of setting up a wallet or writing down a seed phrase either.
While the company has big hopes for Blankos as it onboards more users, the bigger investor opportunity is likely in the game engine that the team is building. The startup’s “Mythical Economic Engine” is being designed to help budding game builders create NFT-based marketplaces that won’t get them in any regulatory trouble, marrying compliance across geographies and tools that help creators comply with anti-money laundering laws and know-your-customer frameworks.
“With any new market like [NFTs], it goes through all these different cycles,” Mythical Games CEO John Linden tells TechCrunch. “We think this will actually change gaming for the long haul. The more we talk to game studios, we’re finding more and more potential use cases.”
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Whatnot wants to be the GOAT of collectible toys, starting with Funko Pops
Funko Pops. You’ve probably noticed them at your local GameStop, Hot Topic or spread out all over your co-worker’s desk. These lil’ vinyl figurines and their big ol’ heads have taken over retail shelves in the last few years. You can now find a Funko Pop! (or thirty) for just about every fandom; there are more than 8,000 different Pops, and that number never seems to stop growing.
Like most collectible things, some Pops are worth more than others — whether they’re obscure characters that didn’t get a big run, limited-edition color variations or were only sold for a day or two at a convention, the rarest Pops can sell for hundreds or thousands of dollars. And, like anything where people are dropping piles of cash, there are folks trying to sell fakes.
Whatnot, a company out of Y Combinator’s Winter 2020 class, wants to tackle the issue of fakes in collectibles by adapting a model proven by services like GOAT and StockX: authenticated resale.
As with the aforementioned, Whatnot works as the obsessively-informed middle man between buyer and seller. Buyer makes an offer, seller sends their figurine to Whatnot, Whatnot uses its growing knowledge of what’s real (and how to flag what’s not) to make sure it’s legit. If everything looks good, Whatnot forwards the Funko Pop to the buyer and takes their cut (about 9%, plus a few bucks for shipping).
“We started out buying and reselling sneakers, actually,” Whatnot co-founder Grant LaFontaine tells me. “Then we started getting into buying/reselling Funko Pops. As we started to do this, we noticed it was much more difficult, and much more unsafe, to buy and sell Funko Pops than it was to buy and sell sneakers.”
Services like GOAT and StockX had “drastically simplified” the process for sneaker fans, LaFontaine says, helping to weed out counterfeits for buyers while limiting potential scams that could hurt sellers.
Today all sales on Whatnot are verified by a human expert. That makes sense for the rarer, more expensive figurines. The “Grails,” as Funko Pop collectors call them — like this Comic Con Sith Trooper that has been selling for around $600-700, or this 2012 “Holographic” Darth Maul that can go for thousands. For the less rare stuff, though, it’s a bit overkill.
With that in mind, Whatnot is building out its database of the red flags to look for with each transaction — things like boxes that are just slightly mis-sized, or a logo that doesn’t look quite right. In time, this could allow for more of their verification to be automated, with the human expert (and the associated higher fees) reserved for bigger transactions.
Whatnot isn’t alone in noticing this market’s potential. StockX, the authenticated resale marketplace that first focused on sneakers, expanded into collectibles late last year. Whatnot is looking to find its fan base by focusing solely on collectibles, giving collectors the exact user experience, filters and info they’d be looking for within a given category.
That’s not to say they’re focusing solely on Funko Pops, though — not in the long run, at least. The team intends to expand into other types of collectibles down the road, with Pokémon cards being the likely next candidate.
Whatnot tells me it has raised a $550,000 pre-seed round from Wonder Ventures, YC, and a handful of angel investors.
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Funko is getting into Fortnite toys because it’d be dumb not to
Funko . Even if you don’t know the name, you’ve probably seen their toys. They’re the ones that make those figurines with the big ol’ heads that line the walls of half the stores at the mall — the ones that seem to exist for just about every pop culture-related license on the planet, from random 80’s horror movies to mega properties like Star Wars or Marvel.
So of course they’re getting into Fortnite toys.
The company announced today that it’ll ship Fortnite-themed toys across 10 different product lines, from clothing, to keychains, to the aforementioned big-headed Pop! figurines. While there don’t seem to be any images of the toys in progress out there just yet, the company says the new stuff should start hitting the shelves by the holidays of this year.
Funko Pop! figures from the company’s Gears of War line — photo by Marco Verch
Fortnite is a pretty obvious fit — and as long as the game’s absolutely ridiculous popularity doesn’t dive off a cliff before Christmas for some reason, it’s a pretty big win.
It’s easy to imagine Funko-fied versions of the game’s most recognizable bits, like a vinyl keychain Battle Bus or a Pop! version of the supply llama. But even beyond that, it could be a pretty consistent source of new, limited run releases — something that Funko loves to do. Fortnite shifts to a new “season” every few months, with each iteration introducing dramatically new character skins and retiring those that came before it. Fortnite’s creators at Epic undoubtedly have the data to prove exactly which skins are most popular, which should help them figure out which ones to turn into merch.
As of April, Fortnite was reportedly already pulling in around $10 million per day on in-game items alone, and adding a bunch of real-world merch to the mix is probably just going to make that money machine crank even harder.
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