Web3 gaming infrastructure startup Xternity raises $4.5 million: Exclusive

Web3 gaming infrastructure startup Xternity raised $4.5 million in a pre-seed funding round as the space continues to grab the most venture funding.

NFX, a pre-seed and seed-stage-focused venture capital firm based in Israel, led the round. Other investors included Jibe Ventures, Flori Ventures, Secret Chord Ventures and vGames, the startup said.

Israel-based Xternity aims to help web2 game publishers adopt web3 technologies, including NFTs, through its "no-code" platform, co-founder and CEO Sagi Maman told The Block.

It's the latest funding announcement for companies pushing web2 into web3. Earlier this year, Nerdystar raised almost $6 million to produce blockchain games based on Line Games’ web2 brands and Paragraph raised about $2 million to challenge legacy publishing giants by offering web3 tools for content creation. 

The number of M&A transactions for NFTs/Gaming has increased for three consecutive quarters, according to The Block Research.

Xternity, co-founded earlier this year by childhood friends Maman and Shahar Asher, says it allows publishers to create NFT collections and offers them a customized wallet, as well as a loyalty club. The platform supports multiple blockchains, including Polygon, ImmutableX, Solana, Binance, Celo and Ethereum, Maman said.

NFX’s founding partner Gigi Levy-Weiss, a former founding CEO of mobile casino game company Playtika, and the firm’s general partner Morgan Beller, who co-founded Meta’s digital currency initiative Libra, have joined Xternity’s board as observers, Maman, also formerly of Playtika, said. Maman added that executives from the other four investors have also joined Xternity board as observers.

There are currently ten people working for Xternity, and the firm plans to add around five more people across functions, including product and engineering, Maman said.