Dapper Labs, which develops the CryptoKitties consumer blockchain collectibles, raises $15M led by Venrock, its second round in 2018 after launching in February
Dean Takahashi / VentureBeat :
Context & Ripple Effects
CryptoKitties went from top Ethereum app by transactions at its November 2017 launch to a spun-out company with a $12M Series A from a16z and USV in March 2018 — but by June, analytics sites showed a sharp drop in daily active users, transactions, and average kitty prices (the usage decline). This $15M Venrock-led round is Dapper Labs' second raise of 2018, arriving months after those metrics turned down.
The signal is that investors are underwriting the team rather than the game's traction: a traditional Sand Hill firm joining crypto-native backers suggests the thesis has shifted from CryptoKitties as an app to Dapper Labs as a consumer blockchain platform.
First-order effects
- Dapper Labs gains fresh runway to keep building past CryptoKitties' fading engagement, with Venrock's lead marking institutional validation beyond the original a16z/USV syndicate.
Second-order effects
- Continued funding despite declining usage lets Dapper Labs invest in infrastructure beyond the cats — the path that leads to its own proof-of-stake blockchain for NFTs rather than dependence on Ethereum.
Third-order effects
- Raising repeatedly against softening app metrics sets up both the upside (a dedicated NFT chain like Flow) and the downside visible later in the corpus: heavy cumulative raises followed by layoffs and a securities class-action once the NFT market turns — a boom-bust structure for consumer crypto companies.
The trend: Venture capital kept funding consumer blockchain startups on platform ambition even as their flagship apps' usage collapsed, storing up both infrastructure wins and painful corrections.