1confirmationInvestment Memorandum: The Meebits family is grossly undervalued

Source: 1confirmation; Compilation: 0xjs@Golden Finance

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

1confirmation has also published an investment memorandum on X on why it is investing 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 behind the CryptoPunks series created in June 2017 and the Autoglyphs series created in April 2019.

CryptoPunks and Autoglyphs are now widely regarded as iconic series in the NFT and generative art space, with both series' floor prices exceeding $100,000. Meebits, a more accessible series launched by Lava Labs, currently has a floor price of approximately $1400. There are 20,000 NFTs, with 10,000 airdropped to CryptoPunks holders, and another 10,000 minted at a price of 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, with a clear appreciation potential of 20 times, based on the real impact released by its artistic creativity, community, and new company development IP bringing value to the series.

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We will invest $3 million in the newly formed MeebCo, which will be led by founder and CEO Sergio Silva. The company will acquire Meebits intellectual property and NFT collections from Yuga Labs and focus on developing these IPs. We are the sole investor in the new organization, which will have a board of directors consisting of 1confirmation, Sergio, Yuga Labs, and future employees. Mike Tomano will join the board of directors of the new entity.

Key assumptions of MeebCo:

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

2. The Perfect Leader: Sergio Silva is a passionate member of the Meebits community, and he will turn this passion into effective leadership, becoming the perfect leader of the new era of Meebits.

3. Create real-world impact and branding: The team will use these artworks to make a meaningful impact in the real world and create one of the iconic consumer brands of the next decade. The opportunities for this IP are endless, and the three main directions at the moment are games, content, and toys. The 3D nature of the characters also makes them ideal for the augmented reality (AR) and virtual reality (VR) fields, where Meebits also has potential as these technologies advance.

Team (Rating 9/10):

Founder and CEO Sergio Silva is proactive and passionate about Meebits. He has 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, outstanding ability, and will be responsible for building teams and developing products.

Products (score 7/10):

Currently, the product is a work of art, and there are no other products besides this. The main task of the company is to develop products that can enhance the visibility and value of Meebits. It is not yet known what it will be like, and this will depend on the execution ability of Sergio and the team. The path taken by Meebits may be similar to the way the Pudgy Penguins team revitalized their series.

Community (Rating 9/10):

Currently, Meebits has over 6000 owners, and the community is strong, which is our most crucial asset. What sets Meebits apart is that the series is relatively accessible (currently, the floor price is about $1400), but it also has high-end artistic attributes (a double-nosed pig sold for over $2 million). One of Sergio Silva's key tasks will be to grow the community from 6000 people to 100,000 as quickly as possible.

Token Mechanism (Not Applicable at the Moment):

There is currently no fungible token, but there is a possibility of an issue 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 currently unclear whether the final product will be a game, content series, toys, or some combination of these, or something completely different.

2. Timing and appreciation space risk: NFTs are currently not favored by the market. We believe they will return on a larger scale, with projects that are creative and have a strong long-term community (community members are not just for making money) leading the trend, but we may also make misjudgments.

Summary (Team + Product + Community + Token Mechanism, comprehensive rating 8.33):

For us, this investment is unique because we are actually co-founding this new entity with Sergio Silva, and there is no clear product direction for the company at the moment. But we believe that the combination of creativity and community makes Meebits one of the best investment opportunities in the NFT space right now, and we're excited to make this investment from the 1confirmation NFT fund. We strongly believe that soon the world's largest consumer brand will be owned by the community and believe Meebits has the potential to be one of them.