Dapper Labs remains a leader in the Play-to-Earn and collectibles markets. Since its launch, it has helped pioneer NFT (non-fungible token) use and has been instrumental in cementing blockchain assets in the sports collectibles market. As such, this Canadian software developer continues to push blockchain technology and its integration into everyday life, resulting in growing demand for the firm’s shares.
Dapper Labs is a privately owned company, meaning that there are additional steps that need to be taken to gain access to these assets. Here’s how you can navigate the complex secondary market and secure access to Dapper Labs pre-IPO shares.
What is Dapper Labs?
Dapper Labs is a blockchain-powered games and collectibles developer based out of Vancouver, Canada. The firm entered the market in 2018 and was founded by Roham Gharegozlou and Dieter Shirley to make blockchain technology more approachable and enjoyable. Originally, the project was named Axiom Zen, but it changed its name before the release of its first gaming title, CryptoKitties.
CryptoKitties was the first NFT-powered game to go viral. The game featured digital playing cards. Each card was an NFT token that had a CryptoKitty with certain features and attributes. The combination of these attributes contributed to the individuality and scarcity of each card. The use of NFTs enabled gamers to create unique, digitally verifiable assets, meaning that certain CryptoKitties could be one-of-a-kind digital assets.
Source – Cryptokitties
The CryptoKitties game was about more than collecting. Users could mate their Cryptokitties and create unique offspring that combined features from both collectibles to create a new and often rare asset. This approach added to the value of each NFT and the excitement of the game.
Cryptokitties was a smashing success that eventually caused so much congestion on the Ethereum blockchain that it ground transactions to a halt, revealing Ethereum’s massive scaling issues. The success of CryptoKitties also demonstrated how NFT gaming could provide unique opportunities to the market, leading to the creation of a lot of pioneering firsts, including standardizing the ERC-721 NFT standard.
How Dapper Labs Revolutionzed Sports Collectibles with NBA Top Shot
Only a few years after the success of CryptoKitties and Dapper Labs was set to release another game-changing platform, NBA Top Shot. This time, the developers didn’t go for a gamified approach. Instead, they sought to conquer the sports collectibles market using NFTs to capture precious moments.
The project was another massive success, which saw the company partner with the NBA to provide unique moments to collectors. In one instance, a video of LeBron James dunking a basketball secured +$200k on the platform, which managed to secure +1m users within its first year of operation.
Dapper Labs learned many lessons from their CryptoKitties venture. One vital lesson was that blockchain congestion can ruin the gaming experience. This understanding led the company to create a purpose-built blockchain for their NBA Top Shot project and following ventures.
The FLOW blockchain improved on scalability restrictions and NFT creation limitations found on Ethereum. The proprietary blockchain provided higher performance due to its structure and its exclusivity to the Dapper Labs protocols. Today, the blockchain hosts a variety of popular platforms, including the NFL All Day and UFC Strike collectibles platforms.
Historical Funding Rounds
Summary of Dapper Labs Funding:
Total Funding: Dapper Labs secured $666M across 9 funding rounds
Largest Round: Dapper Labs’ largest funding round secured $305M in March 2021.
Investors: A total of 128 investors, including 84 institutional and 44 Angel investors, back Dapper Labs
Latest Round: The latest funding round raised $5.06M and was a Series D round held on May 23, 2022.
Funding Rounds Breakdown:
- 5 Early-Stage
- 4 Late-Stage rounds
Key Investors:
Dapper Labs has 128 investors that support the project. The investors include:
a16z, Warner Music, AppWorks, Accomplice, Fenbushi Capital, Venrock, Digital Currency Group, Union Square Ventures, CoinFund, Don Mattrick, Nanon De Gaspe Beaubien Mattrick, Animoca Brands, Glenn Hutchins, William Mougayar, SV Angel, Version One Ventures, James Hutchins, Autonomous Partners Distributed Global, A.capital, Reed-company.com, Republic Capital, L1 Digital, North Island Ventures, Pirata Capital Management, Valor Capital Group, Blockchain Coinvestors, JaVale McGee, Aaron Gordon, Garrett Temple, a16z, , Samsung NEXT, Venrock, Animoca-brands.com, Accomplice, Coinbase, Greenfield, Spencer Dinwiddie, Warner Music, Blockchange, BlockTower Coatue, Michael Jordan, Kevin Durant, Vivek Ranadive, Andre Iguodala, Kyle Lowry, Josh Hart, Spencer Dinwiddie, JaVale McGee, Michael Carter- Williams, Udonis Haslem, Alex Caruso, Andre Drummond, Khris Middleton, Klay Thompson, Shay Mitchell, Domantas Sabonis, Dreamers, Nikola Vucevic, 2 Chainz, Thad Young, AgVenture, Version One Ventures, Will Smith, Ashton Kutcher, 93 Ventures, and many more.
Why Invest in Dapper Labs?
There are many reasons why investing in Dapper Labs could be the right move. For one, the company is a pioneer in the market. It holds first mover status and helped to demonstrate how NFT technology could enhance users’ profitability and demand for titles and digital assets. Since its launch, Dapper Labs has been one of the most vocal supporters of NFT tech.
How Dapper Labs’ FLOW Blockchain Solves NFT Scalability Challenges
The proprietary blockchain FLOW was designed from day one to eliminate many of the issues Ethereum had at the time. Scalability and programmability were the top concerns for the developers who wanted to make the network as easy to use as possible, eliminating technical roadblocks and making the transition into the blockchain sector smoother.
Exploring the KittyVerse: Dapper Labs’ Expansion into NFT Game Development
Another reason why investors continue to seek out Dapper Labs is its recent expansion into developer-centric options. The Kitty Verse allows users to build and play third-party games on the FLOW blockchain. This decision has helped to expand the FLOW development community and helped to drive collaborative efforts across the NFT space.
The History of Dapper Labs: Pioneering NFT Adoption in Gaming and Collectibles
As the first platform to use the ERC-721 NFT standard on a mass scale, Dapper Labs has helped to carve out a niche within the market. Its NFT-powered platforms now include additional features designed specifically for digital collectibles like flexible licensing, NFT creation protocols, and access to secondary markets.
Major Brand Partnerships Fuel Dapper Labs’ Licensing Success
The partnerships that Dapper Labs had to acquire to bring its products like NBA Top Shot to the top have helped to solidify the technology’s viability to capture rare moments. Since its launch, Dapper has managed to ink licensing deals with some heavy hitters, including the NBA, NBPA, WNBA, WNBPA, NFL, NFLPA, LaLiga, UFC, Warner Music Group, Ubisoft, and Genies.
Funding and Investor data sourced from Tracxn
1. Pre-IPO Secondary Marketplace
Secondary markets are purpose-built exchanges that connect pre-IPO shareholders with potential investors. These marketplaces can offer these assets because they work closely with employees, early-stage investors, and venture capitalists, who are crucial to the company’s pre-IPO growth.
Investing in pre-IPO shares of Dapper Labs could offer strong returns if the company’s valuation increases following its IPO. It’s common for company valuations to increase following an IPO. As such, it makes sense to add pre-IPO shares to your portfolio before the firm announces plans to go public.
Secondary marketplaces have many requirements. Here are some concerns you should be made aware of:
Eligibility: This approach requires you to be an accredited investor, meaning you will have to show at least $1M in liquid assets to qualify for access.
2. Private Equity Firms
Private equity firms gain access to pre-IPO shares during investment rounds. They then offer these shares to high-net-worth accredited investors with a commission. Notably, private equity firms are known to have extra stipulations, including blocking the sale of shares for years in some cases.
3. Employee Equity Sales
Many consider employee equity sales as the best way to acquire pre-IPO shares in Dapper Labs. This method of acquiring pre-IPO shares requires you to connect with former employees. It’s common for companies to issue shares as part of an incentive package. Notably, this profit-sharing method has become more popular, leading to more pre-IPO share opportunities for investors.
Private Transactions: There are a lot of hoops you will need to jump through to complete a private pre-IPO transaction, including creating specific legal agreements, conducting valuations, and setting in place any limitations on the transfer of the asset.
Brokerage: Brokers will take a lot of the confusion out of the pre-IPO process. These professionals can guide you through each step, ensuring full compliance and avoiding common errors untrained professionals make.
There are several risks that you should consider before jumping into the pre-IPO shares investment arena. Here are the top concerns:
Liquidity Risk
If you are looking for an asset that you can sell right away, pre-IPO shares are not the best option.
These investments can include sales and transfer clauses that prevent the transfer of the asset until certain criteria, such as the IPO’s completion, are met. It’s even common for pre-IPO shares to require you to wait years before gaining the ability to sell your assets.
Finding a Broker
If you meet the requirements and are comfortable with the risks, several platforms offer access to pre-IPO opportunities:
Forge Global: One of the largest private stock marketplaces, offering shares in late-stage startups like SpaceX, Stripe, and Databricks. Minimums typically start around $100,000.
EquityZen: A popular platform allowing accredited investors to buy into private companies with minimums as low as $5,000. Past offerings include companies like Discord and UiPath.
Rainmaker Securities: A full-service broker that helps source and negotiate private share sales, including opportunities in companies like OpenAI, Stripe, and Palantir.
Hiive: A newer platform with live bid/ask pricing for hundreds of private companies. Transparent and low-fee, with minimums starting around $25,000.
MicroVentures: Offers pooled access to late-stage companies through special purpose vehicles (SPVs), including past investments in SpaceX and Instacart.
EquityBee: Allows investors to fund employee stock option exercises at startups, often at discounted valuations, with minimums around $10,000.
Augment: A digital-first marketplace showing real-time pricing for pre-IPO shares, targeting tech-savvy investors and offering lower transaction fees.
StartEngine Private: Launched in late 2023, this platform offers accredited investors access to Regulation D offerings in later-stage, venture-backed companies. In its first nine months, it generated $16.5 million in revenue, with average investments around $32,000
Important: Always perform thorough due diligence and consult a financial advisor before investing in private company shares.
Valuation of Dapper Labs and Future IPO
Dapper Labs secured a $7.6B valuation on Sep 22, 2021, qualifying it in Unicorn status. The company managed to secure this value through a combination of its unique technology and superior business model. Today, it’s one of the best-known blockchain P2E platforms and has strategic partnerships with some of the biggest names and franchises in the world.
Despite not having mentioned any plans to host an IPO in the future, many indications suggest that a Dapper Labs’ IPO could be a massive success. For one, the company has strong support from the institutional investment sector, with companies like Google backing its maneuvers. Additionally, it has several angel investors who include professional athletes and others who are directly involved in the collectibles market.
If Dapper Labs did decide to host an IPO, it could become one of the largest blockchain-centric IPOs yet. The company has limited competition in the NFT collectible market and remains the top-performing option. As such, those who hold Dapper Labs shares could see significant growth if the company did make the move.
Investing in Pre-IPO Dapper Labs Shares: Conclusion
Investing in Dapper Labs gives you direct access to a leader in mainstream blockchain adoption. The firm combines fast-growing technology like NFTs with gaming and sports to create a unique atmosphere that benefits both the collectors and those creating the memories.
It’s recommended that you do further research and consult a professional prior to making any pre-IPO investments. This maneuver will help to ensure that you remain within your risk appetite. For those who conduct their research and can qualify for Dapper Labs stocks, there could be some major upswings in the future.
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Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or investment advice. Pre-IPO shares are typically available only to accredited investors and carry significant risk. Always perform thorough due diligence and consult a financial advisor or legal expert before making investment decisions.