Market Map: Venture Capitalists Rush to Collect NFT Startups

PitchBook subscribers can dig deeper with our Blockchain Vertical Snapshot report and full market map with details on over 1,600 companies.

NFT companies are divided into seven sub-segments:

  • Art: Platforms that facilitate the exchange of physical and digital art.
  • collectibles: Products that facilitate the exchange of physical and digital collectibles such as sports recaps and trading cards.
  • Gaming: Startups employing NFT technology in video games, enabling new business models such as playing to win.
  • Entertainment: NFT experiences related to non-game entertainment, such as sports and music.
  • Infrastructure: Software solutions such as developer tools, protocols, scalability, and interoperability that support the utility of NFTs.
  • Markets: Exchanges to mint and trade NFTs.
  • Metaverse: NFT experiences related to the evolving metaverse.

Gaming is the largest area of ​​investment within NFTs, with $1.7 billion raised to date, according to data from PitchBook. But as investment in NFT games has increased, startups are feeling growing pains.

Many gamers have been angry at the introduction of NFTs into gaming experiences, seeing them as a ploy to make money.

“Fan pushback to NFTs has been immense,” said PitchBook analyst Ryan Vaswani. Last year, Ubisoft released a platform for NFTs that prompted a quick reaction from gamers.

To win them over, game developers will need to prove that NFTs bring value to games and eventually metaverse-style experiences where digital assets can move between virtual worlds.

Gamers in low-income countries have embraced money-making games that use NFTs, such as “Axie Infinity,” as a way to earn money. But that also comes with challenges. Players who rely on gaming for income are vulnerable to fluctuations in the price of digital currencies.

the more than $600 million “Axie Infinity” hack highlighted another risk for gamers: their valuable digital assets could become targets of cyberattacks. While Axie has promised to restore funds, these high-profile events risk shattering user confidence.

Featured Image via iStock/Getty Images

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