Line Next, the South Korea-based NFT unit of a joint venture between SoftBank and Naver, has secured $140 million from a consortium led by Crescendo Equity Partners, even as the hype around the digital collectibles has faded.
The money raised marks this year’s largest blockchain and Web3 investment in Asia, Line Next said in a statement on Wednesday. The company said it will use the fresh funds to expand its global business and develop new offerings, which include launching a global NFT marketplace, introducing a virtual avatar social app and developing more Web3 games.
“It is significant that we were able to secure this funding in the context of a globally contracting investment environment,” said Youngsu Ko, CEO of Line Next, in the statement. “We plan to use this opportunity to further popularize Web3 and develop a new service ecosystem where users own the value of their digital goods.”
Seoul-based Crescendo Equity Partners, which said it has more than $1.4 billion of assets under management, is backed by billionaire Peter Thiel. Launched in 2012, its other investments include semiconductor equipment manufacturer Hanmi Semiconductor, whose CEO Kwak Dong-shin became a billionaire in July as investors looked for the next beneficiary of the AI frenzy, and Medipost, a Korean biotech founded by Forbes Asia Power Businesswomen honoree Yang Yoon-sun.
Established in 2021, when NFTs exploded in popularity, Line Next is owned by LY Corp., which is the result of a merger in October between Z Holdings and its wholly-owned subsidiaries, including Line Corp., the operator of popular messaging app Line. LY Corp. itself is a subsidiary of A Holdings, a joint venture established in 2021 between billionaire Masayoshi Son’s technology investment giant SoftBank and billionaire Lee Hae-jin’s Korean internet giant Naver.
Line Next raised about $10 million in July 2022 from investors including SoftBank, Naver, Korean billionaire Chung Yong-jin’s retail giant Shinsegae, as well as CJ ENM, the entertainment unit of Korean billionaire Lee Jay-hyun’s conglomerate CJ Group.
The frenzy of NFTs, in which its advocates believe could be a valuable way of proving the authenticity of digital assets, however, didn’t last long. Monthly trading volume for these digital art and collectibles recorded on blockchains has tumbled 94% between January 2022 and November 2023, according to data from blockchain analytics firm Dappradar. An index by data firm Nansen that tracks the market cap of the top 10 NFTs has plunged 72% from its peak in February 2022 as of Tuesday.
Even though the NFT bubble has burst, Line Next has been pushing forward new digital asset-related projects. Over the past year, the company has set up a NFT platform featuring digital collectibles of K-pop stars and has launched several Web3 games. Line Next claimed that its offerings have amassed 5.5 million users with more than 470,000 cumulative transactions over the past year.