Bored Ape Yacht Club creator raises $450 million to build an NFT metaverse

Illustration by Alex Castro / The Verge

Yuga Labs, the owner of three of the biggest NFT brands on the market, has raised $450 million in funding at a $4 billion valuation. The team behind Bored Ape Yacht Club plans to use the money to build a media empire around NFTs, starting with games and its own metaverse project.

The team describes its project as an online role playing game meant to connect the NFT universe. They hope to create a world that isgamified and completely undefiled.

Just weeks ago, Yuga Labs made a major move to consolidate the NFT space with the acquisition of CryptoPunks and Meebits from Larva Labs. The acquisition gave Yuga Labs a bigger roster of intellectual property to use when crafting its game and metaverse plans, and put three of the most lucrative NFT collections under one roof. The company launched a new token last week, which will be used as the primary currency in Yuga Labs.

Yuga Labs is working with a few different game studios to bring Otherside to life. The company plans to create development tools that allow NFTs from other projects to work inside their world, and the game won't be limited to Bored Ape holders.

Yuga Labs thinks that other companies are going about their metaverse ideas wrong, giving the startup a chance to stand out. Greg Solano, a Yuga Labs co-founder who goes by the name Gargamel, says that people won't bond from spending time together in a virtual space with nothing going on. He says that people bond from being put in positions where they have to work together.

Solano says that deep social experience comes from playing with people and making friends. A play-to-earn game is also in the works.

One of the largest funding rounds for an NFT company to date was led by the firm, which has been investing heavily in the Web3 space. OpenSea, Dapper Labs, and Coinbase were funded before. The game studio Animoca Brands, as well as other firms, are joining the funding round. Chris Lyons will join the board of Yuga Labs. The Financial Times reported funding talks last month.

Yuga Labs is an important counterbalance to companies like Meta, according to Chris Dixon, who leads the company's crypto arm.

Yuga Labs has been able to make money. A leaked pitch deck shows that the company made $137 million last year, mainly by taking a cut of transactions tied to its NFT brands, with an astounding 95 percent profit margin. Yuga Labs wouldn't comment on the figures from the deck.

At this point, the company has built very little. According to OpenSea's data, the company has only released one game for a limited period of time, and its NFT collections have 40,000 users at most. Yuga Labs is being given hundreds of millions of dollars to build a gaming company from scratch, off the back of a hugely lucrative art project.

The culture phenomenon and the success of Yuga Labs are what investors are thinking about when funding the company. The company is making a big bet that some type of metaverse project will become the next big thing. They have to build it.