• Revolut — $500 million
• Preply — $10 million
• Allset — $8.25 million
• DMarket — $6,5 million
• Zakaz.ua — €5 million
• ClassTag — $5 million
• Rentberry — $4.5 million
• 3DLOOK — $1 million
• Astromix — $300,000
• Mriyar — $300,000
• Elision — $150,000
• Propertymate — $120,000 
• Go To-U — $100,000

There were several investments with the undisclosed amount:

• Very Good Security — NDA
• eForce — NDA
• Love&Live — NDA
• Respeecher — NDA
• Skyworker — NDA
• PatentBot — NDA
• Meredot — NDA

The editor of AIN.UA tells about the details of the deal.

What does DMarket do?

The company was launched in 2017 by Vlad Panchenko, founder of the Skins.Cash virtual items trading platform, Tamara Slanova, and Alexander Kokhanovskyy, co-founder of the Natus Vincere esports club (the project’s advisor for now). The idea behind DMarket was to build an in-game item trading platform (such as skins for weapons).

In December 2017, the company held the largest Ukrainian ICO of that time, raising the equivalent of $25 million in cryptocurrency. In 2018, due to instability in the cryptocurrency market, the project had to lay off a quarter of its staff.

In 2019, according to the management, fluctuations in the market did not affect DMarket, and the year was successful. In August 2019, the company restarted its platform: it switched from a marketplaces model to an exchange one.

Deal details

The project attracted $6.5 million in venture funding led by Almaz Capital. The company is now looking for up to $2 million more in investments. The shares, sold to investors, and the valuation of the project are not disclosed.

Trip Hawkins, the founder of one of the world’s most famous game companies Electronic Arts, joined DMarket as a board member.

“I love that DMarket is at the intersection of five growth trends in the game industry: advanced social games, virtual goods trading, fashion, eSports, and blockchain. DMarket has a big opportunity to be a new kind of leader in the game industry,” said DMarket’s new board member Trip Hawkins.

He is sure that the in-game market will take off in the next ten years.

What the company is doing now and where the investment will go

In these times of the pandemic and economic crisis, the gaming industry has grown, unlike other industries. The growth was both in sales and the number of users.

“If back at the end of 2019, according to Newzoo, the number of players in the world was 2.5 billion, now it is 2.7 billion. Our figures also increased – in some markets, the number of users increased by 60% compared to the coronavirus crisis period,” said the co-founder of the company.

According to the founders, DMarket now sells goods worth about $100,000 daily. Late last year, the company signed an agreement with Darewise to trade in-game items from the game Life Beyond, and also added a new payment system Paysafe. They are now negotiating with other game developers.

DMarket now has about 1 million users, and revenue in the first months of 2020 was $450,000, as per AIN.UA data.

According to Panchenko, the raised funds will be spent on the further development of DMarket Technology. It is a solution that allows game developers, players, influencers, and brands to create video game content and generate profit from gaming.

It includes financial and trading services, high-speed item trading, work services for opinion leaders directly in games, etc. In the future, the company plans to bring the same technology to other markets of the entertainment industry: music, fashion, cinema. According to Panchenko, if DMarket Technology is the main product, then the DMarket platform is its implementation in practice, something like a case study.

The company also plans to recruit people to the development team in the coming months, in particular, as top managers. They will mainly be seeking developers in Ukraine.

What changed?

• Now DMarket users can not only buy and sell but also exchange items without raising funds both within the same game and between different games.
• Players also got the opportunity to make offers to buy even those items that have not yet been put up for sale by their owners. The owner of such an item can sell it instantly at a suggested price.
• Game developers can monetize their games long before their release thanks to a pre-order system: the developers offer players to buy items from their game on DMarket before launching the game.
• The new platform takes advantage of various artificial intelligence capabilities, including data mining and neural networks, to increase and strengthen gaming communities.

What happened to an old platform?

As the company explained to AIN.UA, the previous version of the platform was built according to a model close to the marketplace or the traditional market where sellers place offers, buyers look through the items, make their choice, and a transaction occurs, which is reflected in the blockchain.

The business model of the new platform is closer to the exchange or stock exchange: sellers create Ask sell orders, buyers make Bid bets that occur in real-time, and the transaction happens for the best pair and is executed in the container of one transaction in Distributed Ledger. DMarket uses distributed ledger technology (DLT) to protect every transaction on the platform.

“This model requires a technical architecture capable of processing a huge number of operations in real-time, which excluded the possibility of the evolutionary development of the platform,” the company explained.

Why this is needed?

“We collected an incredible amount of skin trading data and analyzed countless expert and user reviews to launch this platform,” said Volodymyr Panchenko, CEO of DMarket.

For each item in the user’s inventory, the new DMarket holds an instant auction of bids and offers the best instant sale price. Also, the new platform implements the ability to exchange up to 100 items from the user’s inventory for 100 items in the window, even if they are from another game.

As a result, both the seller and the buyer receive the best transaction conditions and a guarantee of the correct transaction in the Distributed Ledger.

The first version of the platform was released in March 2018. According to Panchenko, it took a year to develop a new platform. The DMarket team is currently working on updates, including exclusive features for those who supported the platform during the creation phase.

The company has confirmed the information about the              reduction of personnel and explained the reasons. According to the co-founder of DMarket, Volodymyr Panchenko, the company had about 160 employees, and management reduced about 25% of the staff. This decision was influenced by two factors.

“The first is the situation in the cryptocurrency market, which now leaves us with far fewer options for maneuvering next year and developing business lines. The second is the development of new markets and geographies, we are now actively working in the USA, and we need support there, including the venture capital investments, this also puts us with certain restrictions that need to be met. Based on these two tasks, we made the final decision on the staff reduction on Friday,” Panchenko said.

To the editor’s question about the company’s financial position, the co-founder replied that DMarket had enough funds for development. “We have already adopted a budget for 2019. We have enough funds for the next year with all the tasks for business development. The funds we raised during the ICO we poured into fiat currency,” Panchenko said.

Now the company plans to develop within the markets of the USA and Asia. An office is being opened in the USA, employees are being recruited there, there is a delay with the opening in South Korea, and negotiations are underway on this issue.

Let us recall, DMarket is a global marketplace for in-game content trading. It was launched by Oleksandr Kokhanovskyi, member of the board of directors of the Na’Vi Ukrainian e-sports club, and Volodymyr Panchenko, the founder of the virtual items trading service Skins.Cash. In December 2017, the company raised a record $25 million at that time for Ukraine on the ICO.