Horizon Blockchain Series A Raise
(Originally posted on Naavik.co Daily Digest Oct. 9)
Earlier this week, Horizon Blockchain Games announced they raised a $40 million Series A at an undisclosed valuation from a group of investors led by Brevan Howard Digital and Morgan Creek Digital. The round also included traditional gaming companies Take-Two Interactive and Ubisoft, notable VCs such as BITKRAFT and Initialized Capital, web3 companies such as Polygon and Everyrealm, and influential web3 founders such as Sebastien Borget (The Sandbox) and Aleks Larsen (Sky Mavis). Horizon previously raised $4.5 million in 2021 at an $89.5 million valuation.
Founded in 2018, Horizon Blockchain Games is a leading web3 consumer infrastructure and game development company. The innovative Horizon Blockchain founders are known for co-authoring the ERC-1155 standard (more on that later) and are headlined by a CEO with 15 years of founding experience, as well as an ex-McKinsey CFO. The team of 60 is attempting to build the long-term go-to solution for consumer onboarding into web3 through its three separate vehicles, including Sequence (an all-in-one developer platform), Skyweaver (a blockchain-trading card game), and Niftyswap (a decentralized digital asset marketplace). Ultimately, while Horizon operates across infrastructure and game development, it’s the infrastructure piece via Sequence that long-term presents the most upside to onboard millions of consumers into crypto and the area where they’ll likely double down.
This piece will explore each of Horizon’s products, and how they fit into the company’s broader ecosystem. I believe the team’s strategy of driving consumer adoption through a tentpole game like Skyweaver and developer adoption through infrastructure tools like Niftyswap and Sequence makes for a valuable roadmap to build toward Series B-level traction.
What Is Sequence?
At its core, Sequence is a ETH-focused developer platform and smart wallet. The platform includes a variety of tools like:
- Token + NFT APIs for all EVM compatible chains
- An out of the box protocol that powers custom-built NFT Marketplaces
- SDK Offerings that can be used with Unity, Unreal Engine, and Mobile platforms
The platform’s non-custodial wallet also offers mutli-sig, credit + debit, and log-in recovery support. Sufficient to say, the platform itself is entirely centered on making crypto-onboarding as seamless as possible.
Sequence is an all-in-one developer platform and smart wallet for the Ethereum ecosystem, minimizing friction for both builders and consumers alike. On the developer side, Sequence offers tools such as Token and NFT APIs for all EVM compatible chains, a protocol to custom build NFT marketplaces, and SDK offerings for Unity, Unreal Engine, and Mobile. Sequence also takes a cutting-edge approach to their non-custodial wallet offering for consumer UX and security. Each wallet is a multi-sig smart contract which means that it’s controlled by multiple private keys, offering improved security over single key wallets. At the same time, it also offers ease of usage and recovery as logins are available from a variety of sources such as email and social accounts. Finally, Sequence integrates direct credit and debit purchases into its wallet, allowing for a seamless consumer onboarding process.
Early data has shown promise for the platform, with integrations across several emerging L2s (Optimism, Polygon etc.) as well as integrations with core IP like Cool Cats, Community Gaming and nearly 40 others. One such implementation, DAZN Boxing, even noted that 80% of its Sequence wallet users are new to crypto. While adoption has slowed pace to only 1–2K new users per day, all-time highs were around 10K+ in early July. In total, 682K Sequence wallets have facilitated over 3.4M total transactions since inception.
Looking ahead, UX and ease of onboarding will be paramount to wallet adoption; in contrast with the comparatively friction-laden process that comes with other wallets like Metamask (and considering its 21 million monthly active userbase), it’s not difficult to see the potential upside that Sequence presents. It has a massive opportunity to become the tools and wallet of choice for millions of consumers onboarding into web3 and crypto.
How Skyweaver Works
One of the more successful consumer applications that has integrated Sequence tools so far is Horizon’s own Skyweaver. Skyweaver is a F2P trading card game similar in style to Hearthstone that leverages the power of blockchain technology to allow for player ownership, verifiable card scarcity, and a card trading marketplace. The game has exploded in adoption from 60K users in the private beta to over 300K users since the open beta launched in February 2022. Skyweaver has earned rave reviews as earlier this year Token Gamer called it “the best blockchain game so far.” Let’s dive into how the game works.
How it works: Each user is given a “hero” and a deck of cards with the goal to utilize its hero and selected cards in battle to attack and outlast the opponent’s hero. Initially, a user selects two of the six “Prisms” (strength, agility, wisdom, heart, intellect) which influence the characteristics of the “hero” that is generated as well as the composition of the deck of cards that they receive as well as the spells, effects, and traits that each card has. Every Skyweaver card has an element (air, dark, earth, fire, light, metal, mind, and water) which determines how different cards interact with each other — for example, light and earth are generally good at healing while fire is generally good at damaging heroes. Once entering battle, users are presented with seven unique cards out of their deck, of which they must choose four. Strategy is important in gameplay, deck building, and choosing which cards to deploy which ultimately makes for a compelling, dynamic, and fun game.
In-Game Economy: It’s important to consider both the function and design of the assets within the Skyweaver economy. Each card in Skyweaver is an “SFT” or “semi fungible token”; in other words, there is a limited supply of identical items (i.e. cards of certain attributes) as opposed to a “one-of-one” entirely unique NFTs. It’s important to understand the three tiers of different cards (SFTs) and how they function in the Skyweaver ecosystem (source):
● Base: these cards cannot be exchanged, traded or sold. They have no intrinsic value, but can be played in all game modes;
● Silver: they can be traded, sold or gifted to friends. They’re slightly more valuable than Base cards, and can be used to enter special combat modes in the game instead of paying the entrance fee;
● Gold: the “trophy” cards of the game. Gold cards are shiny and very apparent on the battlefield. They can only be won through combat in “Conquest mode”, and are only minted once.
These three levels of cards facilitate Skyweaver’s unique economic design through “free-to-own” consumer onboarding (via the Base cards) while still maintaining value in the economy with a limited supply of tradable rare and desirable cards (via the Silver and Gold Cards).
In this way, Skyweaver employs a unique and intriguing economic design optimized for the traditional trading card player. Instead of a native token, its economy is entirely run through USDC and supply and demand of its NFT cards allows users to decide how many additional cards are created. Much like Sequence, Skyweaver is designed to minimize jargon and mechanics that would hinder adoption, instead opting to focus on simple design to minimize speculation. The move is largely reflect in its user base as well, with over 60% of the game’s players being first time crypto users.
Fitting in the Third Pillar, Niftyswap
Perhaps in an effort to build their own killer use case, Skyweaver is also powered by its own Sequence-powered marketplace, Niftyswap. The platform is designed with ERC-1155s and SFTs in mind, allowing for users to buy and sell in-game items while still maintain scarcity in an economically viable way.
Niftyswap has accounted for 147K transactions and $4.1m in total trading volume for Skyweaver alone and also provides liquidity pools for top projects such as Illuvium, Galaxy Fight Club, The Sandbox, and many others. While decentralized NFT and SFT marketplaces have been growing in popularity and Niftyswap is likely to face competition given the the rapid ascent of Sudoswap and Magic Eden’s support for Genopets SFTs, I believe Niftyswap has an inherent advantage in that it has already proven the ability to directly integrate the marketplace into games, as Skyweaver players need not exit gameplay to buy or sell items.
In stark contrast to industry fluctuations seen in centralized marketplace Opensea’s 99% volume crash from its May 1 peak, Skyweaver’s stable liquidity over time (as seen below) indicates a healthy community both in Skyweaver’s userbase and the liquidity providers on the Niftyswap platform.
Why Raise Now:
This Series A raise enables Horizon to double down on its Sequence platform and supercharge developer relationships for better consumer adoption. For example, there’s potential for the Sequence wallet and tooling to be embedded into the largest consumer apps. It’s clear that Horizon has identified infrastructure-level pain points for consumers that currently limit adoption and this raise will directly enable Sequence — and the developers Sequence supports — to address them.
Beyond its core infrastructure product in Sequence, the fundraise will also enable Horizon to grow its own consumer app in Skyweaver. Horizon will attempt to increase awareness through content (they already are regular streamers on Twitch), grow community through tournaments, build out additional card sets like their recent “clash of investors” release and integrate gaming guilds and build out spectator mode. Increased adoption of Skyweaver will in turn directly drive Niftyswap marketplace usage while Horizon additionally pours resources into the platform supporting SFTs from other more web3 games as well.
The fact that the round was oversubscribed during some of the more widely bearish moments of the industry speaks to the conviction that investors have in the team and product — and rightfully so. The innovative team’s dedication to a seamless consumer experience is clearly reflected across each of its dev tools, game, and marketplace and Horizon finds themselves in an only more favorable positioning after raising from such a dynamic group of individuals and investors.
