Pixelmon raises $8M as it seeks redemption for its ambitious Web3 games

Pixelmon has raised $8 million in seed investment for a series of Web3 games. In doing so, the company says it is on the path to redemption in games.

Pixelmon is a Web3 project that got off the ground in February 2022. Pixelmon sold 10,000 non-fungible tokens (NFTs), raising a huge amount of cryptocurrency (valued at $70 million at the time). That was enough money to budget a triple-A video game. But users were shocked when they saw the first shoddy art from Pixelmon. They accused it of being a scam, and didn’t have confidence in its youthful founder, Syber.

Within a few months, Singapore-based LiquidX, a Web3 venture capital studio, took over 60% control of Pixelmon for a total, after taxes and other expenses, of about $40 million (with prices down after the crypto market crash). In September 2022, LiquidX started on a long road to regaining cred for Pixelmon, and Syber became a minority shareholder.

As an example of the redemption, the company has major credible Web3 investors supporting its progress now, said Giulio Xiloyannis, CEO of LiquidX, who spoke with GamesBeat a year ago and again this week in interviews. He pointed to the big success of Palworld with its “Pokémon with guns” survival game, which has had 19 million players in just 13 days.

The world of Pixelmon takes place in the mythical world of Nova Thera, where trainers, the creature companions, must lead their team of Pixelmon to victory. Xiloyannis said his company’s Pixelmon open world survival game is more like “Pokémon with swords and shields,” akin to “Pokémon meets Game of Thrones.”

The project’s art and 3D creatures have been revamped and polished while the team continues to develop the expansive gaming world ahead of its major launch in Q1. The team also introduced evolutions to the Genesis Pixelmon collection, providing ownership rights and access to a sub-pool of licensing revenue for each creature’s IP.

A year ago, I wasn’t ready to write about Pixelmon’s claimed redemption, as it was hiring game industry leaders but hadn’t yet shown off much of what it could do. So I waited. And today the company is showing off it has broad support throughout the investor, crypto and Web3 gaming communities.

“I know the project has a certain past, but it’s truly turning around on that,” Xiloyannis said.

Investor backing

The investors include Animoca Brands, Delphi Ventures, Amber Group, Bing Ventures, Bitscale Capital, Cypher Capital, and several others. This marks a significant milestone for Pixelmon, which introduced a intellectual property fractionalization system, Mon Protocol. This protocol is owned by the token owners and it allows them to guide the direction of the Pixelmon IP, Xiloyannis said.

“We didn’t need the money but we are showing that companies like Animoca believe in the project,” he said.

He said Pixelmon’s unique approach to decentralized IP caught the attention of prominent figures in the industry. Angels who invested included Ray Chan, founder of 9GAG; Kun Gao, founder of Crunchyroll; Robbie Ferguson, cofounder of Immutable; Gabby Dizon, cofounder of Yield Guild Games (YGG); and founders of cryptocurrency exchanges, Bit2Me and Tokocrypto, as well as Web3 advisory firm, Emfarsis.

High-profile industry players Alex Becker, FaZe Banks, Gorilla, Seatin, Loopify, NFTboi, EllioTrades and Zeneca also participated. Ecosystem support came from Mask Network, Merit Circle, and Ordzaar.

Prior to the new cash injection, Pixelmon already boasted a healthy treasury with a runway extending to 2027 at the current burn rate, Xiloyannis said.

“The decentralized IP system that Mon Protocol is establishing is significant because it will empower creative communities and IP core fan bases to participate actively in the long-term success of a consumer franchise, taking full advantage of true digital ownership and network effects,” said said Yat Siu, executive chairman of Animoca Brands, in a statement. “I am thrilled to see Pixelmon further develop its ecosystem of games and become the leading global 18-35 monster collecting IP.”

Pixelmon games

Xiloyannis said the biggest milestones to come out financial. They will have more to do with the launch of the company’s games that use the Pixelmon IP.

Pixelmon has already demonstrated some of its potential with the launch of Kevin the Adventurer (KTA), its first hypercasual game, deployed in October on Coinbase’s native Layer 2.

Kevin The Adventurer garnered 36,000 active players and 10,100 hours played in its launch month. The seed funding will be instrumental in continuing the development of Pixelmon’s diverse portfolio of casual and mid-core games.

“Mon Protocol opens a new and exciting phase in the Pixelmon journey, with $MON as the ecosystem token powering all of our games as well as our fractionalized IP ecosystem,” Xiloyannis said. “We all know that the Pixelmon journey was a nonlinear one, so we are honored to have such high caliber founders and experienced ecosystem partners joining us now. The level of support we’ve received is proof that Pixelmon has truly ‘respawned’ from its tumultuous initial mint and it is a demonstration of Web3’s relentless drive to make this industry a success.”

Xiloyannis said the company didn’t need to raise more cash. He noted that it has a runway that can take it through 2027, based on current cash and spending.

Pixelmon plans to use the funds to further develop its differentiated gaming portfolio, including PixelPals, a hypercasual game featuring pet and habitat management blended with trading card mechanics, set to launch on Mantle in Q1 2024.

The team is also working on a major release for the core Pixelmon IP, with a rebuild of its free-to-play desktop title, Arena, targeting a 2024 release on the PC.

That will lead up to the company’s most ambitious game, Xiloyannis said. Hunting Grounds will be an open-world adventure game with RPG elements and player-versus-player (PvP) autobattler tournaments. It is set for open beta in 2024 and a full release in early 2025, with three distinct modes: combat, social hub/metaverse, and exploration, Xiloyannis said. What’s it about? Monsters, of course.

“We are very excited to be backing Pixelmon on the next chapter of their journey. The ecosystem has shown massive resilience in accumulating its early battle scars and lore, and we believe the team led by Giulio is strongly positioned to show the world what IP forged in the fiery flames of crypto is capable of,” said Piers Kicks, founding partner at Delphi Ventures, in a statement.

Future plans

Pixelmon plans to grow its decentralized IP across verticals including merchandise, trading card games (TCG), animated series, comic books, and more, via franchises, sublicenses and joint ventures. Overall, Xiloyannis sees a mix of both casual and midcore games (those that are hardcore in nature, played in short sessions).

Xiloyannis was part of the founding team of the Southeast Asian online fashion retailer, Zalora, where he served as a cofounder and member of the executive team from inception through IPO. The company has 62 people.

The Pixelmon team brings together industry veterans, including executive producer Izzal Ibrahim and gaming engineering director Sean-Li Murmann, both with extensive experience at Streamline studios on titles such as Cyberpunk 2077 and Final Fantasy XV, and art director Stefan Ivanov, with 16 years of experience at EA and Ubisoft. Anthony Bray also joined a while ago as a producer.

Today, Pixelmon boasts 200,000 followers on X, 30,000 members on Discord, and over 25,000 unique NFT holders, with an engaged on-chain community of over 60,000 wallets. Xiloyannis said the most significant number is the wallets, as it shows people are willing to make purchases for Pixelmon assets.

Pixelmon’s ambitions extend beyond gaming into merchandise, trading card games (TCG), animated series, comic books, and more, with plans for franchises, sublicenses, and joint ventures.

As for the state of crypto, there’s a rally in the market for Bitcoin again, but Xiloyannis doesn’t want it to get too frothy. He said the bear market was good for building and establishing the plans for true ownership and IP management. And he feels good the company stuck with it.

“It’s a testament to our resilience,” he said.