Just yesterday I wrote about the extraordinary way Yuga Labs, the company behind the Bored Ape Yacht Club NFTs and Apecoin, is setting up and organizing its various projects. Just now, the company announced it received a $450 million investment from a group of investors led by leading venture capital firm Andreessen Horowitz. That puts Yuga Labs, which recently acquired the popular CryptoPunks, at $4 billion. And that's very reasonable.
On Twitter a few days back @LeonidasNFT (which, given his handle, does not seem to be an outspoken critic of this sector) shared the extensive pitch deck of no less than 90 pages. Every analyst and investor in the crypto and NFT world is currently plowing through that pitch deck again, trying to understand how such a young company manages to get such a huge valuation.
In the comprehensive presentation, which appears to be authentic, a few things stand out:
- Bored Apes Yacht Club (BAYC) and Mutant Apes Yacht Club (MAYC) are just the beginning of an entire ecosystem of gaming, apparel and events
- 46% of Yuga Labs team is female: this must be a record in the technology sector
- Yuga Labs knows particularly well why people buy Bored Apes, a striking quote reads, "celebrities are buying Apes to signal that they know what's up. So not for the intrinsic value, but for the flex.
- Apecoin is the first step in the strategy to attract a larger NFT audience for whom Bored Apes are now unaffordable
- Yuga Labs is not building yet another metaverse, but, note: "the (italics of Yuga Labs) interoperable gaming metaverse - a MetaRPG."
- The vision of allowing users to create their own NFT characters and in-game assets is a success factor
- The announced SDK (toolbox) that collections, creatives and developers can work with is also a major success factor. A nice summary of the strategy is:
"SDKs for all the things that matter to our users today and a platform for them to collaborate on what's next."
I foresee a whole wave of bruisers digital nomads who update their LinkedIn profiles like crazy, from social media experts (2015) and ICO experts (2017), they are now becoming Metaverse guides and MetaRPG gurus.
Yuga Labs makes a bold statement, "What we've created combines: storytelling, pop culture, taste, and fun in just the right amounts." But I do agree.
Because if Yuga Labs manages to build out its current market position in accordance with the strategy summarized in the pitch deck, the company will be a giant money machine (or Ethereum machine, if you will). The land drops alone generate revenue of $200 million at Ethereum's current value, with an ROI of, mind you, 77x!
The entire financial forecast reads like a science fiction movie with, in addition to land sales, revenue sources called Mechanical Dogs, Mecha Ape and Goblins, among others. Madness, you may think, but it should lead to annual sales in 2022 of over half a billion dollars and a profit margin of 98.8%!
Given the current success of Yuga Labs, this revenue seems very achievable; it's hard to judge on cost and profit margin. After Consensys' hit, which just raised $450 million on a $7 billion valuation, it is clear that the entire ecosystem around Ethereum is growing in value tremendously fast.
It's nice that Yuga Labs gets the $4 billion valuation from Andreessen Horowitz, the investment firm that Netscape founder Marc Andreessen started with his friend Ben Horowitz. Netscape itself was worth $3 billion in 1995 at the close of trading on the day of the IPO. Analysts fell over each other in their disapproval because while Netscape was the most popular Web browser, it was not yet making a profit. That doesn't bother Yuga Labs, and yet it will rain vinegar in the columns devoted to the company in the days and weeks ahead. As always, the motto is: don't pay attention to the media, but check the blockchain for real transactions within the entire ecosystem that Yuga Labs is developing at breakneck speed.