1confirmation investment memo: Meebits series is seriously undervalued

Source: 1confirmation; Compiled by: 0xjs@黄金财经

Recently, MeebCo, the company behind the NFT project Meebits, announced the completion of a new round of financing of US$3 million, all invested by 1confirmation.

1confirmation also released an investment memorandum on X on why it participated in MeebCo, as follows:

Summary:

Meebits is an NFT (non-fungible token) series created by Matt Hall and John Watkinson of Lava Labs in May 2021. Lava Labs is also the team that created the CryptoPunks series in June 2017 and the Autoglyphs series in April 2019.

CryptoPunks and Autoglyphs are now widely regarded as iconic series in the fields of NFT and generative art, respectively, with floor prices of both series exceeding US$100,000. Meebits is a more affordable series from Lava Labs, with a current floor price of about $1,400. There are 20,000 NFTs, 10,000 of which were airdropped to CryptoPunks holders and another 10,000 minted at 2.5ETH. Based on the floor price, the current fully diluted valuation (FDV) is $28 million. We believe that the Meebits series is severely undervalued and has a clear appreciation potential of 20 times based on its artistic creativity and the real-world impact released by the community and new companies to develop IP and bring value to the series.

We will invest $3 million in the newly formed Meebit Company (MeebCo), which will be led by Founder and CEO Sergio Silva. The company will acquire Meebits intellectual property and NFT series from Yuga Labs and focus on developing these IPs. We are the only investor in the new organization, and the board of directors of the new organization will be composed of 1confirmation, Sergio, Yuga Labs, and future employees. Mike Tomaino will join the board of directors of the new entity.

MeebCo's Key Assumptions:

1. Unique Artwork and Community: We believe that in the long term, the core value drivers of NFTs are artistic creativity and community strength. Meebits has a unique combination that will create significant long-term value if we can expand the community and bring real-world impact to the IP.

2. Perfect Leader: Sergio Silva is a passionate member of the Meebits community who will turn this passion into effective leadership and become the perfect leader for the new era of Meebits.

3. Create Real-World Impact and Brand: The team will use these artworks to create meaningful impact in the real world and build one of the iconic consumer brands of the next decade. The opportunities for this IP are endless, and the three main directions are games, content, and toys. The 3D nature of the characters also makes them well suited to the fields of augmented reality (AR) and virtual reality (VR), and as these technologies advance, Meebits also has potential to develop in these areas.

Team (Rating 9/10):

Founder and CEO Sergio Silva is a driven and passionate person about Meebits. He previously worked at Fireblocks and founded Popset. His main skills are promoting Meebits and building partnerships to expand the ecosystem. He is full of positive energy and outstanding ability and will be responsible for building the team and developing the product.

Product (Rating 7/10):

The product is currently a work of art, and there is no other product. The main task of the company is to develop products that will increase the popularity and value of Meebits. What exactly this will look like is unknown and will depend on the execution ability of Sergio and the team. The path taken by Meebits company may be similar to the way the Pudgy Penguins team revitalized its series.

Community (Rating 9/10):

With more than 6,000 holders, Meebits has a strong community and is the most critical asset we have. Meebits is unique in that the series is relatively affordable (currently the floor price is about $1,400), but also has high-end art attributes (a two-nosed pig sold for more than $2 million). One of Sergio Silva's priorities will be to grow the community size from 6,000 to 100,000 as quickly as possible.

Token mechanism (not applicable yet):

There are currently no homogenous tokens, but there is a possibility of issuing them in the future.

Key risks:

1. Execution risk: Although there are excellent series of works and a strong community, there is currently no mature product. The team must focus on the right product and launch it. It is not clear whether the final product will be a game, a content series, a toy, or some combination of these, or something completely different.

2. Timing and appreciation space risk: NFT is currently not favored by the market. We believe they will come back on a larger scale, and projects with creative ideas and strong long-term communities (who are not just in it for money) will lead the way, but we may also be wrong.

Summary (Team + Product + Community + Token Mechanism, Comprehensive Score 8.33):

This investment is unique for us because we are actually co-founding this new entity with Sergio Silva, and the company does not have a clear product direction yet. But we believe that the combination of creativity and community makes Meebits one of the best investment opportunities in the NFT field at the moment, and we are very happy to make this investment from the 1confirmation NFT Fund. We firmly believe that soon the world's largest consumer brands will be owned by the community, and think Meebits has the potential to be one of them.