Yuga Labs Raises $450M & The Art Fair Duopoly
The round kicks off a larger metaverse project, and how Art Basel and Frieze came to dominate the art fair world
Cultured is a newsletter that gets readers up to speed on the most interesting things going on at the intersection of finance, art, collectibles, NFTs, and more. Cultured is produced by Otis, an alternative investment platform that was recently acquired by Public.com.
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🗞 STORIES OF THE DAY
Yuga Labs closes $450 million funding round, plans to create metaverse project
The past few weeks have felt like a constant stream of news about Yuga Labs and BAYC (we covered it here and here). It all came to a head this week with an announcement that Yuga Labs has secured $450 million in funding to build its own metaverse project.
Led by VC firm a16z, the funding round puts Yuga Labs’s valuation at around $4 billion. It’s a strong bet for investors — Yuga has been financially successful, bringing in $137 million last year according to a leaked pitch deck.
Yuga will use the funds to create a new metaverse project called Otherside. It’s a MMORPG that’s meant to connect to the company’s NFT assets and other projects. The company is also planning a play-to-earn game that will launch later this year.
Our Take: Yuga Labs is taking an innovative approach to creating a major metaverse platform.
There is already a proliferation of metaverse platforms, including Decentraland and Sandbox. These services focused on building the infrastructure for the world first and selling land to raise funds. Yuga Labs took the opposite approach: it created/acquired successful NFT collections and is now hoping to parlay its popularity into a virtual experience. The massive popularity of projects like BAYC and CryptoPunks may help Yuga Labs dominate the metaverse.
It’s becoming clearer than ever that there are two major players in the art fair world: Frieze and Art Basel. As smaller fairs are pushed out of major cities, the market is increasingly concentrated on just a few events.
Earlier this year, the Grand Palais in Paris announced it had booted Fiac from the site, replacing it with Art Basel. Fiac has run annually in Paris for almost 50 years and is a stalwart of the city’s arts scene. But in recent years, the fair failed to perform financially.Â
As smaller, single site fairs like Fiac are pushed out, Frieze and Art Basel are gaining traction. Art Basel paid a whopping $11.6 million for a 7-year contract in Paris, meaning it will run 5 fairs per year. Frieze has also expanded with plans to open in Seoul this year.
Our Take: The art fair world is starting to resemble the gallery world: a few players at the top and a bunch of smaller ones scrounging for scraps.
Art fairs and art galleries have one job: to sell very expensive art. In both cases, the larger ones tend to do it better. That’s why mega galleries like Gagosian and David Zwirner have dominated the market, leaving smaller galleries to pick at what little sales are left. Now it seems that Art Basel and Frieze are poised to do the same thing to the art fair world.
✨ AROUND THE INTERNET
Who’s doing NFTs now? It was a busy week in the metaverse with new celeb projects from Sylvester Stallone and Sir Mix-A-Lot, as well as brand projects from Almond Breeze, Stella Artois, DraftKings, Acura, and TIME Magazine. (Check out the full list of NFTs by celebs and big brands on Otis Mag).
A rare copy of the first Marvel comic sold for $2.4 million at auction.Â
Vintage bars from 2PAC’s childhood poetry booklet could fetch as much as $300,000 when it goes up for auction as part of Sotheby’s hip hop-themed auction.
G2 Esports has sued blockchain company Bondly over a botched NFT project. The company is claiming more than $5 million in damages.
Weekend read: For this edition of the Whitney Biennial, which opens in New York next week, the curators focused on artists in and around the border with Mexico.
