Futureverse is growing its operations with four moves: a new $54 million series A funding round, a $50 million venture fund, an artificial intelligence-powered text-to-music tool and an accelerator program for early-stage tech startups. The Beverly Hills-based company said that its $50 million venture fund, Born Ready, will invest in technology companies it could potentially collaborate with in the future.

Futureverse’s platform is focused on AI and metaverse applications, all powered by blockchain technology. It developed its own decentralized blockchain system, called Root Network, which functions as the platform’s first layer.

“AI allows for humans to be able to create things with much more speed and efficiency, and so what we have underneath our platform is multiple layers of blockchain,” said Shara Senderoff, Futureverse co-founder and chief strategy officer. “If you want to take a digital collectible … from one place on the Internet to the other when the Internet is a bit more immersive, which is what the next evolution of the Internet is, the technology underneath needs to be able to effectively speak to each other so that you can move things seamlessly from one place to the other.”

Senderoff founded the company with Aaron McDonald, who is now its chief executive. Both came from a background in venture capital, and Senderoff said that as a result they see value in incentivizing developers with investment to garner help developing Futureverse and the Root Network.

“The beauty of blockchain
is that you participate
in a secondary royalty
every time one of your assets
is sold.”
Shara Senderoff

“We view the metaverse as just the evolution of the Internet,” Senderoff said. “We don’t view it as this virtual reality experience or a game. We view it as the complete, evolving change of the Internet where the power becomes in the hands of the consumer, and individuals and humans are at the center of the Internet, versus corporations.”

Company synergy

As a rollup of 11 different companies that Futureverse has acquired, its services include a smart wallet called FuturePass, which provides user onboarding for web3 applications and stores digital assets and tokens. The platform also includes an AI gaming platform with a “smart” soccer game that launched in partnership with the International Association Football Federation, known as FIFA; a marketplace for non-fungible tokens; and a gamified loyalty program called FutureScore. 

“We are in conversations with big intellectual property partners that we just haven’t announced yet, which will be utilizing all of those brands,” Senderoff said. “We’ll start to take (these tools) out to the rest of the world in the coming months, and then everyone will start to see, okay, they tested this and proved it with their audience, but now all these bigger brands are coming in to use it.”

With about 250 employees, Senderoff said growth has been steady and fast since its founding in 2022.

“I would say we built by acquisition to even begin,” Senderoff said. “That 250 is the culmination of those 11 companies. Now it’s about continuing to develop really quickly and scale.”

Ralph Lin is the managing director of the USC Viterbi School of Engineering’s Office of Technology, Innovation and Entrepreneurship. He said that acquisitions are typically driven by the desire to acquire one of three things: customers, technology or talent.

“Futureverse seems more like an ecosystem play, meaning that they are hoping to build, buy or incubate complementary companies to form an ecosystem that can fulfill Futureverse’s vision for the metaverse,” Lin said.

The company published a research paper this month highlighting the features of Jen-1, a new AI-powered tool developed by Futureverse that generates musical compositions from text. The research paper claimed that the tool represents “a significant advancement in the field of text-to-music generation.”

“Through in-context learning, Jen-1 performs various generation tasks including text-guided music generation, music inpainting and continuation,” the paper stated. “Evaluations demonstrate Jen-1’s superior performance over state-of-the-art methods in text-music alignment and music quality while maintaining computational efficiency.”

Futureverse is growing its partnerships and investments with a new tech accelerator program called Base Camp that is backed by the Born Ready fund. The 12-week program commences in January and will accept between six and 10 companies, which will each receive mentorship and $100,000 of funding. The accelerator will focus on companies that are in either pre-seed or seed-funding stage. Senderoff said that Born Ready had invested in seven companies so far, including blockchain gaming developer Polemos, and that it will eventually invest in “well over” 60 to 75 companies. Born Ready is intended to accelerate the development of startups that either Futureverse or the Root Network could collaborate with in the future, or that could contribute to the development of its protocol infrastructure.

“The Born Ready fund is focused on either developers who want to further the development of the Root Network, or applications that could utilize some or multiple (of our protocols),” Senderoff said. “We’re starting to field inbounds from other web3 developers or companies who believe that they can collaborate with things that we already have in market.”  

Lin said that one of the tricky things about acquiring any startup is integrating the new customers, technology and talent into a cohesive, functioning whole.

“Almost by definition, early-stage startups have products that are less mature than at more mature companies,” Lin said. “That often means that product behavior is not super robust nor well documented.”

NFT royalties and revenue

Futureverse’s revenue model varies by platform. Its games are based on a monthly subscription, while its NFT marketplace brings in substantial capital due to the royalties attached to assets. Senderoff said that when it first began dropping NFT collections during the market’s early boom, 10,000 NFTs would generate millions of dollars in sales revenue for Futureverse. The company charges transaction fees for some of the platforms that it offers and is preparing to release its own token.

“The beauty of blockchain is that you participate in a secondary royalty every time one of your assets is sold,” Senderoff said. “So, because we have, collectively, the largest number of NFTs held in the existence of the current NFT market, every time something is traded, we’re receiving royalties.”

Futureverse doesn’t intend to invest in a wave of hiring with the proceeds of its series A funding. Rather, it will put the capital towards further development of the platform and its technology.

“In our mind, the metaverse actually exists at the data layer,” Senderoff said. “That means when you’re surfing the internet, you as a human control your identity, your finances and your digital collectibles, because that’s where we’re headed.”