Arcane Ventures Investment Landscape: Exploring New Consumption Paradigms in the Web3 Era
Written by: angelilu, Foresight News
In 2022, "metaverse" was awarded the second place in Oxford's annual word list, and the metaverse, shedding its "bubble" image, attracted the attention of numerous venture capitalists. Concepts derived from the metaverse, such as blockchain games, IP, and NFTs, also gained popularity. Leading funds and traditional financial institutions responded quickly to this trend, with organizations like Spartan Group, HSBC, and Invesco launching billion-dollar metaverse special funds in 2022. This trend continues, and in March this year, game-focused venture capital Bitkraft also launched a token fund of approximately $220 million, investing in blockchain games and digital entertainment.
Born in the "Year of the Metaverse"
Of course, new venture capital funds are also actively positioning themselves. Established in the "Year of the Metaverse," Arcane Ventures focuses on blockchain technology and cutting-edge technology in Asia, currently managing assets of $200 million. The strength of its team is also noteworthy; its founding partner Neil Su previously served as the investment director at private equity firm Bond Capital Partners, while another partner, Evans Huangfu, was the head of Huobi Ventures at Huobi Group and the youngest head in Huobi Ventures' history.
For a young venture capital institution, Arcane Ventures' investment landscape is beginning to take shape, but its investment strategy is already traceable:
Layout in the "Web3 New Consumption" Field
After in-depth analysis of the 31 projects invested in by Arcane Ventures, it can be observed that their investments primarily cover virtual IP, blockchain games/metaverse, infrastructure, DeFi, and community sectors. Arcane has not adopted the "broad net" strategy preferred by most investment institutions. The distribution of investment numbers also indicates that Arcane Ventures' investment focus remains on virtual IP, blockchain games, metaverse, and user-friendly infrastructure in the "Web3 New Consumption" field.
Arcane partner Evans Huangfu stated, "In recent years, the blockchain industry has gradually expanded from an engineer-led financial sector to a consumer-friendly industry. We are committed to driving the blockchain industry toward a more popular direction to ensure that more people can benefit from this innovative technology."
Such an investment strategy makes sense. With the popularization of blockchain technology and the promotion of large-scale adoption of Web3, Web3 will become the new normal in the digital age, with the consumer entertainment industry playing a crucial role in this process. Moreover, the combination of Web3 and the consumer entertainment industry has inherent advantages; NFTs and digital collectibles can serve as catalysts for product innovation, while the application of the metaverse and virtual IP disrupts traditional brand marketing rules, elevating brand imagery from a single identifier to a vivid presence in virtual spaces. With the support of decentralized technology, native Web3 consumer entertainment can truly empower users with digital ownership and agency, placing users at the center and deepening the bonds between platforms and users, brands and consumers.
Emphasizing Synergistic Effects
While focusing on investments in the Web3 new consumption field, Arcane also emphasizes the synergistic effects between investment projects. In other words, Arcane does not only focus on the value of a single project when investing but also values its coordination within the overall business strategy. From its investment landscape, it can be seen that Arcane is still involved in many infrastructure projects. This is because they recognize that any type of project requires the support of "infrastructure" projects. Here, Arcane plays an important role as a connector and intermediary, assisting upstream and downstream enterprises in establishing connections.
For example, in the process of Web3, privacy protection is becoming increasingly important. Arcane has made early arrangements by including Polyhedra in its investment landscape, a project focused on zero-knowledge proof DID, which can provide long-term privacy solutions for Arcane's other investment projects, ensuring the security and commercialization of user data.
In addition, Arcane is building a complete ecosystem around the highly valued Web3 new consumption field. To help more talents from the Web2 industry enter Web3, Arcane's investment landscape includes projects like Particle Network and OpenFort, which can help developers lower the entry barrier.
Arcane partner Evans Huangfu stated, "Teams from Web2 can rely on Particle Network's authentication services for Web3 development, which includes social login, user interface customization, secure hosting, and fast transactions. Particle Network provides these teams with a bridge from Web2 to Web3. Meanwhile, OpenFort offers 'wallet as a service' software products, creating customized account abstraction solutions specifically for blockchain games."
Arcane's investments in gaming/entertainment projects can utilize Pass3’s advertising network to expand in the Southeast Asian market. Another investment project, the blockchain game and gaming infrastructure layer Fusionist, can balance its own development and synergistic promotion. Fusionist's mainnet Endurance has currently accumulated 1.5 million wallet addresses, maintaining over 100,000 daily active addresses, thus allowing Arcane's invested blockchain game projects to deploy across multiple chains on Endurance, significantly enhancing promotion speed.
Arcane also values the synergy between IP companies and blockchain games. For example, the IP acquired by the Japanese IP company Kasagi Labo under Arcane can be integrated into Arcane's blockchain game projects, maximizing resource sharing and flow.
The following is a comprehensive list of the 31 investment projects disclosed by Arcane Ventures, exploring its layout in the "Web3 New Consumption" era.
Overview of Investment Projects
IP & Creator Platforms
Animoca Brands
Animoca Brands is a developer and publisher of blockchain-based games and digital collectibles. Before entering the blockchain gaming space in 2018, Animoca Brands was primarily focused on traditional mobile game development and was listed in Australia. After 2018, its star products include sandbox game The Sandbox and NFT project Mocaverse, among others. In addition to blockchain game development, Animoca Brands is also an early investor in metaverse projects and blockchain game studios such as Axie Infinity developer Sky Mavis, Decentraland, and Dapper Labs.
Yuga Labs
Yuga Labs is a blockchain technology company that develops NFTs and digital collectibles, with its first product being the viral Bored Ape Yacht Club (BAYC) NFT. Additionally, Yuga Labs has acquired blue-chip NFT projects like CryptoPunks and Meebits, and launched the cryptocurrency ApeCoin, as well as developed metaverse projects like Otherside and strategy game LoTM.
Outland NFT
Outland NFT is a crypto art platform founded by a core executive team from art institutions, galleries, and museums. The website includes reviews, collections, dialogues, news, and recommendations, gathering critiques and discussions about art, technology, and NFTs.
RepubliK
RepubliK is a Web3 creation platform that allows content creators to connect with their audiences and utilize built-in smart contracts to handle monetization processes, enabling content creators to create, connect, and be rewarded. The protocol was launched in November 2022 and recently completed a $6 million seed round financing at a valuation of $75 million.
Kasagi Labo
Kasagi Labo is a publishing and licensing company focused on producing animations, comics, and TV dramas, acquiring intellectual property and transforming original IP into licensed anime products.
EMERGE Group
EMERGE Group is a market technology agency specializing in developing optimal commercialization solutions for content creators, IP holders, advertising inventory, and brands. In the Web3 space, it has established a strategic partnership with Web3 game publisher Immutable Games to conduct marketing activities.
Blockchain Games / Metaverse
Fusionist
Fusionist is a blockchain game and gaming infrastructure layer that currently supports Ethereum and BNB Chain. It launched its mainnet Endurance in January this year. The game includes construction simulation, turn-based tactics, exploration, and expansion genres, where players take on the role of mech commanders, manage their planets, collect rare resources, upgrade technologies, and establish interstellar fleets for space warfare through PvP and PvE battles.
Stella Fantasy
Stella Fantasy is a character-collecting NFT action RPG developed by Ring Games, founded in 2019 by former core developers of the globally popular game "King's Raid," dedicated to developing new high-precision action games and other Web3 games.
Puffverse
Puffverse is a dreamy metaverse designed as a casual party game with whimsical 3D cartoon characters, invested by Xiaomi and launched on the Xiaomi App Store. Its products include Puff NFT, on-chain multiplayer game PuffGo, metaverse and UGC platform PuffWorld, wallet integration, and Web3 dashboard PuffTown, as well as UGC PuffLand for game design. The economic model includes tokens PUFF and vePUFF, where PUFF is the circulating token and vePUFF is the governance token.
Unlike other blockchain games, Puffverse aims to connect Web3 and Web2. In addition to enhancing gameplay in the Web3 version, it has also released several Web2-only versions of PuffGo that do not involve tokens/NFTs to increase brand awareness.
Moonveil Entertainment
Moonveil Entertainment is a Web3 game studio with a team from the gaming industry background of "League of Legends," "Teamfight Tactics," "Minecraft," and more.
TTT
TTT is a Web3 game incubated by blockchain game publisher Xterio, including racing and shooting PVP game types, integrating Web3 economy, and is currently under development.
Space Nation
Space Nation is a AAA space opera Web3 massively multiplayer online role-playing game (MMORPG), co-founded by Hollywood director Roland Emmerich, who directed "The Day After Tomorrow" and "2012," Jerome Wu, head of operations for "World of Warcraft" in China, veteran game producer Tony Tang, and media entrepreneur Marco Weber. The core project Space Nation Online has been in development for over three years, with a total investment of $50 million, entering Alpha testing in August, and is expected to officially launch in the second quarter of 2024. The economic model includes the game's governance token OIK, utility token CHR, and NFTs.
Mythic Protocol
Mythic Protocol is a Web3 collaborative entertainment protocol aimed at creating an entertainment product ecosystem that combines blockchain technology, gaming, and creative media, planning to release in the form of games and comics, gradually evolving into a cinematic universe, with the first project being a rogue-lite ARPG using blockchain technology.
Gameta
Gameta is an NFT game ecosystem designed to bring Web2 users into the metaverse through automatic on-chain address creation, low gas fees, and optional private key custody. Users can register their Gameta wallets to receive NFTs for free, and earn GDO rewards while playing games, which can be exchanged for USDC.
MetaOne
MetaOne is a "Game Guild as a Service (SaaS)" platform dedicated to bringing large games and guilds into blockchain gaming. It integrates into game architecture to mine relevant data for guild analysis, equipped with guild management tools, provides asset management to help stakeholders generate income, and designs smart contracts to execute cross-chain investments securely and transparently.
Midnight Society
Midnight Society is a blockchain game studio, with its first game being the vertical extraction shooter "Deadrop," which combines level design from arena shooters, the scale of battle royale, and strategic gameplay from extraction shooters, featuring a vertically designed map. The game is currently open to its Tower Key and Founders Pass holders.
Infrastructure
Consensys
Consensys is a blockchain technology company providing Ethereum-based software and solutions for enterprises, developers, and individuals. Its founder Joseph Lubin is also one of the co-founders of Ethereum. In addition to development and consulting services, its products include the MetaMask wallet, Infura development suite, Diligence smart contract auditing service, and the open-source blockchain Quorum.
Particle Network
Particle Network is a Web3 infrastructure aiming to introduce convenience, interactive efficiency, data autonomy, and modular adaptability for users, protecting user privacy and enhancing interaction efficiency. Its V2 version will build an intent-centric, modular Web3 access layer, including zkWaaS (Zero-Knowledge Proof Wallet as a Service) and Intent Fusion Protocol, providing a series of modular components such as Confidential Login, Confidential Transaction, DApps Intent Framework, and Intent Solver Network.
OpenFort
OpenFort is a crypto infrastructure service provider focused on developing "wallet as a service" software products for game developers and publishers, making interactions with on-chain assets in games as simple and programmable as data interactions. Recently, it provided account abstraction solutions for the game subnet Beam launched in collaboration with Merit Circle and Avalanche.
Polyhedra
Polyhedra provides trustless and efficient interoperability solutions for asset transfers, messaging, and data sharing between various Web2 and Web3 systems through zero-knowledge proofs. Its products include cross-chain infrastructure zkBridge, ZK client zkLightClient, credential system ZK-DID, and programmable NFT protocol ZK-NFT.
UXUY
UXUY is a decentralized multi-chain trading platform based on MPC wallets, reducing the usage threshold by providing mnemonic-free and gas-free solutions, offering a trading experience similar to traditional CEX platforms. It currently supports eight public chains, including Ethereum, BNB Chain, Tron, Arbitrum, Polygon, Avalanche, Fantom, and Optimism.
Pass3
Pass3 is a Web3 advertising company aimed at providing a value exchange system for advertisers, publishers, and users, offering in-game reward advertising solutions (out-of-app). Its main product is the advertising placement honor wall Pass3 Honorwall, where users can earn rewards by clicking on ads placed through Honorwall. In addition to Arcane's investment, Pass3 has also received investments from Pantera, Sequoia, Coinbase, Jump, Spartan, and others.
Nest
Nest aims to solve the control issues of digital identity, assets, and transactions in the real world, providing blockchain functionality and infrastructure to support most distributed services and products.
Fabric Cryptography
Fabric Cryptography is a manufacturer of cryptographic hardware, focusing on the design, research and development, and manufacturing of cryptographic chips. This year, Fabric Cryptography launched a decentralized market for cryptographic and outsourced proof generation in collaboration with ZK technology developer Nil Foundation, aiming to achieve faster, more scalable, and privacy-preserving zero-knowledge proof computations.
DeFi
APY.Vision
APY.Vision is a data platform built for DeFi protocols and investors, capable of tracking users' liquidity pool yields and impermanent losses, monitoring liquid staking, and analyzing historical gains and losses.
AlgoRai Finance
AlgoRai Finance is a decentralized finance platform providing structured products and derivatives on the Algorand and Ethereum blockchains. It currently offers structured products for Algo, BTC, and ETH, generating yields through strategies such as automated covered call and put options.
First Digital
First Digital is a technology-driven financial institution that launched the reserve-backed stablecoin FDUSD in June 2023, which is now live on Ethereum and BNB Chain.
BBOX
BBOX is a decentralized perpetual exchange selected for Binance Labs' sixth incubation program, aiming to optimize the trading experience through dynamic AMM, multi-asset signals, and OEV capture technologies, providing more earning opportunities for liquidity providers.
BasedApp
BasedApp is a Web3 bank designed to enable users to consume, send, and invest cryptocurrencies anytime and anywhere. Its features include a crypto Visa card, support for account abstraction, and support for email or Google account logins, with services initially offered on the Polygon network.
Community
Discord
Discord is a communication platform that combines text, voice, and video chat, primarily used by gamers but also utilized by the crypto community for real-time interaction.
Vega Idol
Vega Idol is a Web3 entertainment platform centered around Asian idol selection, utilizing a decentralized reality show competition mechanism during the selection process, allowing fan communities to participate in the selection, formation, and promotion of idols through a token economic model and product design, enabling fans and new-generation idols to grow together and share profits.
