Non-fungible tokens or NFTs began to gain popularity throughout niche circles of blockchain and crypto enthusiasts over a handful of years ago. However, it wasn't until Christie's auction house sale of “The First 5,000 Days” in March 2021 that the concept of art produced on the blockchain exploded onto the mainstream. The digital asset, the first of its kind to be bought at auction, is a collage of images created by Michael Winkelmann, professionally known as Beeple, which sold for $69.3 million.
Concurrent with this uptick, last year, two of the largest venture capital firms worldwide, Andreessen Horowitz and Paradigm (Crypto Fund), became leading investors in the NFT space. And they are far from alone in betting on the hyped-up digital assets—fund managers and VC firms have followed suit in building out NFT strategies and investment frameworks. According to data tracked in the PitchBook Platform, as of October 13, global capital invested in NFTs swelled to $5.7 billion across 1,071 deals.
Alongside accessibility to a broader market and greater control over their work, verifiable authenticity is a key driver for NFT artists and creators. The traditional route of selling art involves networking with a gallery or auction house. But, by cutting out the middleman, the artist can directly connect with their audience and receive a more significant payout for their work. Through terms pre-established by a smart contract, the creator sets a percentage of royalties earned on every sale in perpetuity.
Try your hand at minting an original NFT with with our interactive art board below. If you were an artist with a clamoring fanbase, upon completion, you could use any crytpocurrency facilitator like, OpenSea, to sell the final product.
Below we look at leading NFT VC investors from 2021 to present, as of September 16, 2022. NFT investment counts represent deals for each firm per data sourced from the PitchBook Platform, during the same period, by either follow-on or new investments.
NFT's association with the emergence of Web3, the third iteration of the World Wide Web, built on the blockchain and premised on security and data decentralization, has driven optimism for digital assets and art among investors and artists. Web3 will reinforce and support the use of cryptocurrencies, decentralized finance (DeFi), NFTs, and token-based economic exchanges.
According to PitchBook’s Q1 2022 Emerging Tech Indicator, a report that tracks promising technologies and companies receiving early-stage VC funding, Web3 & DeFi deals are among some of the quarter’s top performing.
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