Bored Apes creator Yuga Labs raises $450 million

Yuga Labs — creator of the Bored Ape Yacht Club and now owner of popular NFT collections CryptoPunks and Meebits — has raised $450 million in funding led by Andreessen Horowitz's crypto fund.

• Animoca Brands, LionTree, Sound Ventures, Thrive Capital, FTX, and MoonPay, among others, participated in the round, which values the startup at $4 billion post-money.

Why it's the BFD: Despite a recent slowdown in NFT trading volume, investors are still bullish on the sector and throwing their weight behind the current market leader.Driving the news: Since launching last spring, Yuga Labs' Bored Ape NFTs have risen to be the highest-valued collection on the market, according to CoinMarketCap.

• And with its acquisition of CryptoPunks and Meebits IP earlier this month, the company now controls five of the top NFT collections.

Yuga is clearly looking for ways to grow its community beyond those who can afford to buy NFTs selling for hundreds of thousands of dollars.

• Last week it issued a token — dubbed ApeCoin — that would let everyday users invest in the ecosystem.
• It also gave a sneak peek at an upcoming metaverse project called Otherside.

Yes, but: The token launch was not without controversy — the price collapsed almost immediately upon issuance, as NFT owners who were airdropped ApeCoins flooded the market with tokens for sale.

• Furthermore, at least one enterprising crypto bro exploited the liquidity marketplace NFTX by taking control of a pool of Bored Apes and getting ApeCoins for free.
• And though the token is governed by a so-called decentralized autonomous organization (DAO), some are questioning how truly decentralized the governance structure is — since a big chunk of the token allocation is going to Yuga Labs and its investors.

What we're watching: Yuga Labs is clearly the early leader in a nascent market, and now it has a good deal of capital to build a moat.

• But will the startup be able to remain the leader in a market where "what's cool" is always subject to change?
• And will it be able to attract mainstream users who aren't on the bleeding edge of early adoption?

Of note: Yuga's fundraising talks with a16z were first reported by Axios' Kia Kokalitcheva and Dan Primack in early February.