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Say hello to Vietnam’s latest tech unicorn: Axie Infinity

*Sky Mavis is a prior fund portfolio company*

Sky Mavis, the developer of NFT gaming sensation Axie Infinity, announced the close of a US$152M Series B led by Andreesen Horowitz (A16Z) with participation from existing investors Libertus Capital, 500 Startups Vietnam, and Konvoy, as well as new investors Accel, Paradigm, and SNÖ Ventures.  The financing, coming less than 6 months after their Series A, valued the company north of $3 billion.

There’s a long way to go before blockchain games can gain access to the vast majority of gamers,” I wrote in our first investment memo for Sky Mavis.  Indeed, Axie Infinity had just 600 monthly active users at the time. It would be easy to think it might take a decade to “get there”, if at all.

Nonetheless, we built conviction that NFTs could transform gaming & drive blockchain adoption beyond cryptocurrencies, and that the Sky Mavis team could be part of that.  I’m very grateful that the Sky Mavis team too built conviction in us.  I still remember waiting in suspense as Trung reflected silently on my pitch about how we could help.  After what felt like ages, he said yes.  With that, the eight-person Axie team started working out of our office, joined our accelerator program, and, well, the rest is history.

Just a couple of years later, there are more than 1.8 million daily active users spread across virtually every country in the world.  More than $2 billion of transactions have happened on the Axie Infinity marketplace, with more than $500M happening in the last 30 days, making it the #1 NFT gaming marketplace and the #2 across all NFT marketplaces worldwide.

I think we can safely say that Sky Mavis wasn’t merely part of the NFT gaming transformation, but has led it.

Today, we’re thrilled to have a16z, Accel, and Paradigm join the journey. When other growth-stage investors were still wrapping their heads around Axie’s unbelievable journey, a16z’s Arianna Simpson was already “all-in” and flew half-way around the world to seal the deal.

It remains to be seen where the company ultimately ends up.  But the trajectory is undeniably exciting:

axie revenue by month

Data as of September 2021 from Axie World.

The founders remain laser-focused on their long-term vision.  Over the past months, as revenue went through the roof, “heavy hitter” investors started knocking on the door, skeptics threw rocks through their windows, and a horde of developers started launching their own NFT gaming projects next door, I have watched the Sky Mavis team maintain ice-cold blood in their veins.

Gaming has never been a winner-take-all space. But a paradigm shift from pay-to-play to play-to-earn opens up a universe of opportunity for the boldest teams to win.  Not only have we seen that in Axie’s numbers, but also in the businesses being built around Axie Infinity, from folks like Yield Guild Games (also backed by a16z) building on top of Axie Infinity to various teams aiming to create “the next Axie Infinity”.

More than just a game, Axie Infinity has transformed lives.  It has become a critical lifeline for many lower-income people, especially those hit hard by the global pandemic.   As my colleague Binh has opined, Axie Infinity has also become a gateway to financial inclusion.  Indeed, there are now more Filipinos with Ronin wallets (developed by Sky Mavis) than there are with credit cards.

Sky Mavis is now Vietnam’s third unicorn and the fastest-ever to get there.

VNG, founded in 2005, is said to have taken ~10 years.  VNLIFE (parent company of VNPAY), founded in 2007, is said to have taken ~14 years.  Sky Mavis managed to reach this milestone in less than 4 years, with less than $10M of venture financing and only a few dozen team members. I can’t wait to see what they’ll do with $150M+ in new financing.

axie funding graphics

My colleagues and I believe that a wave of internationally iconic tech startups can arise out of Vietnam. And we hope that, just as with Sky Mavis, we’ll be there to back them from their early days.

To [Axie] Infinity, and Beyond!

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#Vietnam #NFTs #axieinfinity #500VN #AVV

Some thanks:

– To Hau, now Partner at AVV, for sourcing the opportunity and for providing world-class support as program manager of 500VN’s Silicon Valley-inspired, Saigon-based accelerator, Saola.

– To the Sky Mavis team for your outstanding work; for bringing us on your journey, accepting our investments in the Seed, Series A, and now highly-competitive Series B; and for living & breathing our team value of “Think in decades, not days.”

Standard disclaimers: This is not investment advice regarding any Sky Mavis or Axie Infinity security, related asset, or associated investment vehicle. Views shared here represent my own and not necessarily those of 500 Global’s or AVV’s.