Dapper Labs, the company that built NBA Top Shot and Flow blockchain, has announced they are raising another round of funding at a $7.5 billion valuation. This is nearly triple what Dapper’s recent $2.6 billion valuation on its last round of funding, a total of $305 million, in March.
This new round of funding comes as a bit of a shock, especially so close to the end of the last round of funding, announced on March 30. However, it’s still unknown how much funding Dapper Labs, the private tech company, is actually raising.
But let’s not cut any corners. The new valuation of $7.5 billion is massive for Dapper. The valuation based on the new funding round, led by Coatue, means a few things:
- Dapper Labs is a top 50 unicorn company — on track to become the largest private tech companies in the world
- The company’s valuation would have gone up 100-times in less than two years
- NBA Top Shot is only the beginning for Dapper Labs
There’s not much info yet, with lots to come on who is going to be a part of this round, how much money they’re raising, why are they raising it? It’s likely that this information will eventually trickle out, but for now, we are left wondering the answers to these very questions.
Listen to Max Minsker discuss Dapper Labs’ new round of funding on the MomentRanks Podcast. Also available on Apple Podcasts.
Talking about Dapper Labs’ funding round
Dapper Labs’ valuation has increased about 100x in the last two years. And most of that has come since 2020, since the launch of NBA Top Shot.
This makes Dapper Labs one of the 50 unicorn companies which have raised at a cap of this size to date. And they are starting to creep up on some massive companies like Robinhood, Plaid, Chime, Canva, and many others.
This is a vague valuation right now, but even this early figure is significant when looking at Dapper Labs in the large picture of the ecosystem.
Why is Dapper Labs exploding?
Keep in mind that Dapper created the Flow blockchain, a first of its kind blockchain built to be a foundation for internet-scale protocols which focus on the user experience. Consumer blockchain applications are starting to take off.
Not only that, but they also have studios, like the team that built NBA Top Shot. This means they have the best of both worlds: They’re selling picks and shovels — the blockchain, and they’re the gold — or, the consumer applications built out of these studios. Doing both of these is absolutely massive.
There are two layers here that Dapper Labs uniquely interests investors. If Flow continues to expand, it’s likely that Dapper Labs will be one of the most valuable private companies in the world.
When you triple your valuation in a matter of months, it’s a great sign that Dapper Labs is going to be worth tens of billions of dollars by the end of the year. Eventually, of course, this has to level off, but it’s an interest ascension so quickly.
It’s obvious that investors are starting to flock to this type of company, and there’s a lot of interest in Dapper Labs, specifically.
Why would Dapper Labs raise funding again?
Why raise money now? With the information we have currently, it doesn’t make sense for Dapper Labs to be raising this kind of money right now.
There’s no way they’ve spent even a majority of the capital — the $305 million — from the last round they raised. Typically, a company raises money promising to build something, then once they build something, they can attract more customers and users.
Once you raise the funding round, you go heads down, and work on the project that you have promised. You raise with a particular goal or strategy in mind, then once you raise that money, you go out and execute that strategy over the course of six to 18 months, or even longer.
But Dapper Labs just raised a bunch of money. They’re already a profitable software company, and they’re certainly not short on funds. But they’re back into raising mode.
Why would the same company — Coatue — lead another round of funding, just weeks or months later, for triple their last investment? It doesn’t make sense.
That is, unless there is something new, and currently under-wraps.
Maybe there were a ton of investors who want to get in, but in this case, it seems there may be something that we don’t know. The most obvious thing it could be is a new project.
Could Dapper Labs be working on a new NFT project?
We already know about UFC and Dr. Seuss NFTs coming to the Flow blockchain, both created by Dapper.
A new studio would be relatively expensive, and it’s worth raising for. If Dapper gets a big contract, major intellectual property, that’s something you can raise for and something that will surely generate investor interest.
A new round of funding may not work without some new type of content.
They also could be looking to invest in other Flow companies. Dapper Labs CEO Roham Gharegozlou has promised that they’re going to invest into the Flow ecosystem, and it’s a way to use their cash to invest in other projects.
It could also just mean huge improvements coming to the Flow blockchain, like a massive infrastructure upgrade that could be a major project.
But it’s clear that Dapper Labs will soon have the funding to make big investments in other companies or NFT projects. Or they’re looking to start a new NFT project of their own.
That’s just what we’re expecting. To see what Dapper is really working on, we’re going to have to see. But the new valuation so soon appears to be news for the NFT space, and anyone holding their NBA Top Shot Moments.
Follow @MaxMinsker on Twitter.
Additional reporting and editing by Christian Hardy.