Cryptokitties captured the hearts of Ethereum enthusiasts with its adorable digital collectibles. Now, it’s captured $12 million from venture capitalists who believe it can turn into a profitable company.
The funding is led by Fred Wilson at Union Square Ventures and Chris Dixon at Andreessen Horowitz, the famed venture capital firm that’s made early investments in companies like Coinbase, Twitter, and GitHub.
Cryptokitties launched in November 2017 as a project inside of Axiom Zen, a Vancouver-based studio. With its series A, Cryptokitties will spin off into its own company.
Roham Gharegozlou, CEO of both Axiom Zen and Cryptokitties, said he has about 20 employees focusing on the kitties and plans to use the funds to grow his team, including by adding roles for artists and content creators. “We’re super excited about the potential of Cryptokitties and crypto-collectables,” Gharegozlou told Business Insider. While many cryptocurrency-based companies chose to raise money by selling tokens, Gharegozlou decided to go with a traditional Series A round, in which investors buy equity in a startup in exchange for cash and mentorship. Cryptokitties doesn’t actually even have a token. The game, which is based on the Ethereum blockchain, lets users buy collectible digital kitties in exchange for ether, the cryptocurrency on the Ethereum blockchain. Users can buy and “breed” digital cats and sell them on a marketplace for more ether. The most expensive cats on the marketplace are priced around $55.8 million. The game doesn’t have much to it besides buying and selling, but Gharegozlou intends to build out a whole gaming universe around the collectible kitties, before exploring other crypto-collectable projects. “This is the early glimmers of what a blockchain-based game economy could look like,” Gharegozlou said.