Mythical's cautionary tale for Web3 gaming

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The Daily Pitch: VC

August 28, 2023

The Daily Pitch is powered by PitchBook’s industry-defining research and best-in-class data

In today's Daily Pitch, you'll find:

VC funding for gaming may be flat, but the sector is still reaching for the clouds

Mythical Games was a Web3 gaming darling, then came layoffs, a down round and a lawsuit

Are IPOs back? Instacart files for long-awaited market debut

Investor appetite remains for European software companies despite tougher dealmaking conditions

Today's Top Stories

How Mythical became a cautionary tale of the Web3 gaming gold rush

(Jenna O'Malley/PitchBook News)

Web3 gaming enjoyed massive investment in 2021 and early 2022 as VCs chased the next big thing in interactive entertainment. Now, that gold rush is over.

Mythical Games, a one-time darling of the space, is finding out what happens when overzealous investment in a sector suddenly ends. Along with a $37 million down round, the startup has completed a third round of layoffs, scrapped its cash bonuses and shifted to issuing cryptocurrency awards to employees, and sued three former executives.

Former employees share with PitchBook how the startup's fortunes suddenly turned.

Recommended Reads

The Silicon Valley elite who want to build a city from scratch. [The New York Times]

Why the battle against the fungal apocalypse is just beginning. [Wired]

In the race to sell AI chips, how do the giants stack up? [Visual Capitalist]

Since yesterday, the PitchBook Platform added:

298

People

70

Companies

1

Funds

See what our data software can do

The Daily Benchmark:
2015 Vintage Global VC Funds

Median IRR

23.20%

Top Quartile IRR

29.11%

0.41x

Median DPI

Select top performers

Index Ventures Growth III

India Quotient II

Summit Partners Venture Capital Fund IV

*IRR: net of fees

56 Funds in Benchmark »

Check out the latest version of PitchBook Benchmarks

VC Deals

India-based grocery delivery startup Zepto has raised $200 million at a $1.4 billion valuation from investors including StepStone Group and Goodwater Capital, according to reports.

International payments company LemFi has raised a $33 million Series A led by Left Lane Capital.

AI SaaS company Aily Labs has secured a €19 million Series A led by Insight Partners.

Qase, which offers a software testing platform, has raised $7.2 million across Series A and seed funding rounds. The Series A was led by Chrome Capital.

Calopad, the Swiss developer of a heat patch used to treat local pain, has raised €4.2 million from investors including the Swiss government-backed Technology Fund.

Helsinki's Metroc, which offers a sales platform for the construction industry, has secured €2 million from backers including Lifeline Ventures.

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In 2022, more than $200 billion in ecommerce merchandise was returned, significantly straining merchant supply chain operations. In this discussion, PitchBook analyst Eric Bellomo hosts Kyle Bertin from VC-backed Two Boxes, developer of a returns processing platform. Key topics include:

An overview of the state of reverse logistics and the current state of operations.

Technical and strategic trends impacting reverse logistics in the near-term.

Opportunities and challenges to designing scalable and sustainable reverse logistics processes moving forward.

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PE Deals

I Squared Capital has been in talks to acquire Arriva, a UK-based bus and train system specialist, from German railroad operator Deutsche Bahn at a potential valuation of roughly $1.7 billion, Bloomberg reported.

GKSD and Italian hospital operator Gruppo San Donato have agreed to acquire American Heart of Poland, a cardiovascular care provider, in a deal valued at around $539 million, Bloomberg reported.

PAI Partners has agreed to buy pet food maker Alphia from JH Whitney Capital Partners in a deal that Reuters reported would value the company at around $1 billion, including debt.

Veritas Capital has made an offer to acquire BlackBerry, a Canadian software maker formerly known for its cell phones, Reuters reported.

Portfolio Companies

Cybersecurity startup Wiz is considering a bid for SentinelOne, Bloomberg reported. Wiz is backed by investors including Lightspeed, Insight Partners and Sequoia.

Exit & IPOs

Marketing automation company Klaviyo has filed for an IPO on the NYSE. Klaviyo has raised funding from investors including Accel, Sands Capital and Summit Partners.

Biotech company RayzeBio has filed for an IPO on Nasdaq. RayzeBio's backers include Sofinnova Investments and Viking Global Investors.

SoftBank-backed food delivery company Swiggy is resurfacing plans for an IPO, Reuters reported. The Indian company had placed its plans on hold due to weak markets, according to the report.

Investors

Blackstone has agreed to sell a 22% stake in the Bellagio casino and resort in Las Vegas to Realty Income for $300 million, The Wall Street Journal reported. Realty Income will also invest $650 million for preferred equity through its credit business, valuing Bellagio at $5.1 billion.

Chart of the Day

Source: PitchBook's Q2 2023 European PE Breakdown

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Mythical's cautionary tale for Web3 gaming

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