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By Hannah Miller | Bloomberg
Despite a steep drop in venture funding for crypto companies, some startups are still managing to secure fresh capital. Stardust, which provides developer tools for building blockchain-based games, said Tuesday that it raised $30 million in a funding round led by crypto venture capital firm Framework Ventures.
Acrew Capital, Blockchain Capital and Distributed Global participated in the Series A round. Stardust declined to provide its valuation, but said that it was higher than in its previous funding round.
The Palo Alto, California-based startup was founded by Chief Executive Officer Canaan Linder in 2018. He said in an interview that he first came across blockchain when he discovered CryptoKitties, a virtual game that allows players to own, trade and breed cats represented by nonfungible tokens. He previously worked as a software engineer for Bloomberg LP. He said he was drawn to the game because he’s always been an avid collector—he loves Yu-Gi-Oh! trading cards and named his company after his favorite Stardust Dragon card.
But he didn’t always have the easiest time playing CryptoKitties. “The user experience, even for me as a software engineer and developer, was very difficult,” he said.
He built Stardust with the goal of making it easier for developers to design more accessible virtual games that are built on blockchains like Solana and Polygon and incorporate crypto elements like NFTs. Managed by a 40-person team, Stardust charges game creators a monthly per-player cost, as well as a fee for each blockchain transaction.
Even though overall VC investing in crypto startups is down, funding for NFT gaming startups has shown some resilience. Michael Anderson, co-founder of Framework Ventures, said his firm invested in Stardust because he thinks the company will help expand blockchain gaming, including to those active in traditional gaming. Without a company like Stardust, he said, “there isn’t the level of infrastructure that will be able to bridge web2 gamers and web3.”
The use of NFTs and blockchain in gaming has sparked controversy among players, but Linder said it’s important to bring traditional game developers into the mix. Stardust has already teamed up with game publisher Tilting Point to help its developers build blockchain games.
“Web3 is an industry that is not going away,” he said.
More stories like this are available on bloomberg.com
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