Dapper Labs

Sea Group

Dapper Labs

Platform and marketplace — Dapper Labs builds NFT products and earns revenue from primary sales (minting new NFTs and selling them to users), marketplace transaction fees (5% on peer-to-peer trades), and licensing fees paid to sports leagues for using their IP. The company also built the Flow blockchain, which it controls and operates.

Revenue is heavily tied to NFT trading volume and new user acquisition. The licensing deals with NBA, NFL, UFC, and LaLiga give Dapper Labs exclusive rights to create digital collectibles from official content — a massive competitive moat when the market is hot, and a significant cost burden when the market cools.

Sea Group

Sea runs three distinct businesses under one roof, and the genius of the structure is how they feed each other.

Garena is the gaming division. It develops and publishes games — most famously Free Fire, which Sea built itself after years of just licensing other people's games.

Free Fire launched in 2017 and became a phenomenon in emerging markets. It's a battle royale game optimized for low-end Android devices and slow internet connections.

Exactly the phone most people in Southeast Asia, Latin America, and India actually own. Garena makes money through in-game purchases — skins, characters, seasonal passes.

At its peak, Free Fire had over 100 million daily active users.

Shopee is the e-commerce marketplace. It operates like a hybrid of Amazon and eBay — sellers list products, buyers purchase, Sea handles payments, logistics coordination, and marketing.

Shopee makes money through advertising, transaction fees, and value-added services for sellers. It's now the dominant e-commerce platform in Southeast Asia and has a significant presence in Brazil.

SeaMoney is the fintech arm. It offers mobile wallets, digital payments, buy-now-pay-later, and banking services through MariBank in Singapore.

The pitch is simple: hundreds of millions of people in Southeast Asia are unbanked or underbanked. Give them a mobile wallet tied to their Shopee account and they'll use it for everything.

It's the super-app play, executed patiently.

Dapper Labs

Roham Gharegozlou was running a blockchain company called Axiom Zen when his team launched CryptoKitties in November 2017 — a game where users could buy, breed, and trade digital cats as NFTs on Ethereum. It went so viral that it congested the entire Ethereum network and accounted for 25% of all Ethereum traffic.

CryptoKitties proved that people would pay real money for unique digital assets, but it also proved that Ethereum couldn't handle consumer-scale applications. Gharegozlou spun out Dapper Labs in 2018 to solve both problems: build consumer NFT products AND build a blockchain (Flow) that could actually handle millions of users.

The NBA came calling in 2019, licensing their highlights for what became NBA Top Shot. When Top Shot launched in October 2020, a LeBron James dunk clip sold for $208,000.

By February 2021, Top Shot was processing $50 million in daily transactions. The NFT boom had arrived and Dapper Labs was at the center of it.

Sea Group

Forrest Li moved from China to Singapore in 2005 to do his MBA at Stanford. He didn't go back.

In 2009, he founded Garena — which literally means 'Global Arena' — as an online gaming platform for Southeast Asia. The region was massively underserved.

Hundreds of millions of young, mobile-first users with low PC penetration but exploding smartphone adoption. Nobody was building for them.

Li saw that gap and went straight at it.

Garena started by licensing popular PC games — League of Legends, FIFA Online — and localizing them for markets like Indonesia, Thailand, Vietnam, and the Philippines. It was a straightforward licensing model, unglamorous, not the kind of thing that gets TechCrunch headlines.

But it worked. Garena quietly became the dominant gaming platform across Southeast Asia.

The company rebranded to Sea Limited in 2017 when it IPO'd on the New York Stock Exchange, raising $884 million. By then, Li had already launched Shopee in 2015 — an e-commerce marketplace — and SeaMoney, a digital payments and financial services arm, was taking shape.

Three businesses. One holding company.

The bet was that gaming would fund the others until they could stand on their own. That's exactly what happened.

Dapper Labs

Licensing deals with major sports leagues gave Dapper Labs content that no competitor could replicate. NBA Top Shot specifically targeted sports fans, not crypto enthusiasts — a much larger addressable market.

The custodial wallet and credit card payments removed every crypto friction point, making it possible for someone with zero blockchain knowledge to buy an NFT in two minutes. Pack drops with limited supply created urgency and excitement similar to physical trading card releases.

Building the Flow blockchain gave Dapper Labs control over transaction costs and speed, avoiding Ethereum's congestion and gas fee problems. Celebrity involvement (Michael Jordan, Kevin Durant, Will Smith all invested) generated press coverage and credibility.

Sea Group

The counterintuitive move was using gaming to subsidize e-commerce. Most tech companies pick a lane.

Sea used Garena's cash flows — which were enormous when Free Fire was at its peak — to fund Shopee's aggressive, money-losing expansion. They didn't need to raise debt or dilute shareholders to burn cash in new markets.

The gaming division was basically an ATM.

Free Fire itself was a masterclass in product-market fit. Instead of porting a premium game to low-end markets and watching it fail, Sea built a battle royale game from scratch that ran on 1GB RAM Android phones with patchy 3G connections.

The game was optimized for exactly the hardware that 800 million people in emerging markets actually owned. Nobody else was doing that.

Shopee's growth hack was localization taken to an almost absurd degree. They didn't just translate the app.

They hired local teams in every market, ran country-specific campaigns, integrated local payment methods, and partnered with local logistics providers. In Brazil, they ran Shopee-branded motorbike delivery.

In Indonesia, they integrated with hundreds of local courier companies. The playbook was: be more local than the locals.

The final piece was the flywheel. A Garena user downloads Free Fire, spends money on in-game items using SeaMoney's wallet, then starts buying physical goods on Shopee with the same wallet.

Three products, one ecosystem, one user. That's the compounding effect Li was building toward from day one.

Dapper Labs

The NFT market collapsed. NBA Top Shot's monthly sales fell from $224 million in February 2021 to under $5 million by late 2022.

The $7.6 billion valuation from 2021 looks nearly impossible to justify with current revenue. Massive layoffs — the company cut over 50% of staff in multiple rounds through 2022 and 2023.

The Flow blockchain never achieved the developer adoption needed to become a major ecosystem — most NFT activity stayed on Ethereum and later Solana. Licensing deals with sports leagues require minimum guarantees regardless of volume, creating fixed costs that hurt when revenue drops.

Regulatory risk — the SEC has investigated whether NBA Top Shot moments are unregistered securities. And the core question: are digital sports highlights a lasting collectible category or were they a pandemic-era novelty?

Sea Group

The post-pandemic collapse was brutal and nearly existential for the stock, if not the business. During COVID, Sea was the perfect story — gaming was up, e-commerce was up, digital payments were up.

The stock hit $372 in October 2021. Market cap touched $200 billion.

Sea was the most valuable company ever to come out of Southeast Asia.

Then the world opened back up. Free Fire's daily active users fell off a cliff as people left their homes again.

Garena had funded the empire, and now the empire's funding engine was broken. Sea lost its license to publish Free Fire in India after the Indian government banned Chinese-linked apps.

India had been a massive market. Gone overnight.

Sea responded by cutting costs aggressively — laying off staff, retreating from markets like France, Spain, Poland, and India where Shopee had expanded without yet reaching profitability. The stock fell from $372 to under $40 by early 2023.

A 90% drawdown. That's not a correction.

That's a reset.

The deeper challenge is structural. Shopee competes with Lazada (backed by Alibaba), TikTok Shop (which has exploded in Southeast Asia), and increasingly with Temu and Shein.

These are not small competitors. TikTok Shop in particular has disrupted the e-commerce landscape in Indonesia and Thailand faster than most analysts expected.

Sea has scale and local knowledge, but the fight for Southeast Asia's e-commerce market is far from over.

Dapper Labs

NBA Top Shot — officially licensed digital basketball highlights ("moments") sold as NFTs. Users buy packs, trade moments, and complete challenges.

NFL All Day — same concept applied to American football highlights. UFC Strike — officially licensed UFC fight moments as NFTs.

LaLiga Golazos — Spanish soccer league highlights as digital collectibles. Flow blockchain — Dapper Labs' own blockchain designed for consumer applications, used by NBA Top Shot and other products.

Dapper Wallet — custodial crypto wallet that works with credit cards, removing the complexity that makes normal crypto wallets unusable for regular people.

Sea Group

Free Fire is the crown jewel — a mobile battle royale game with over 100 million daily active users at its peak, built specifically for low-end Android devices in emerging markets. It's been the most downloaded mobile game globally multiple times and remains dominant across Southeast Asia and Latin America despite declining from its COVID peak.

Shopee is Sea's e-commerce marketplace and the business with the highest long-term ceiling. It operates across Singapore, Malaysia, Indonesia, Thailand, Vietnam, Philippines, Taiwan, and Brazil.

It's consistently ranked the most-visited e-commerce site in Southeast Asia. The app includes livestream shopping, local seller tools, Shopee Pay, and Shopee Food in select markets.

SeaMoney — now operating as the financial services umbrella — includes ShopeePay (mobile wallet integrated with the Shopee checkout), SeaBank (a licensed digital bank in the Philippines and Indonesia), and MariBank (a digital bank in Singapore). The pitch is financial inclusion for the underbanked, backed by transaction data from Shopee.

Dapper Labs

Investors include Andreessen Horowitz, Coatue Management, GV (Google Ventures), Samsung, and celebrity investors including Michael Jordan, Kevin Durant, and Will Smith. The $7.6 billion valuation was reached in a 2021 funding round.

Sea Group

Sea went public in 2017 without needing a late-stage mega-round from the usual suspects. But it had institutional backing from early on.

Tencent is the most significant external shareholder — the Chinese gaming giant held a roughly 22% stake at various points, which gave Sea both credibility in gaming and a complicated geopolitical headache as anti-China sentiment grew in Southeast Asia and the U.S.

Naveen Tewari's General Atlantic and other growth equity funds participated in rounds before the IPO. Post-IPO, Sea attracted attention from large institutional investors including T.

Rowe Price, BlackRock, and various sovereign wealth funds drawn to the Southeast Asia growth story.

Masayoshi Son's SoftBank also took a stake — consistent with SoftBank's bet on emerging market consumer internet platforms. The Tencent relationship is the most interesting one because it's both a competitive asset (access to gaming IP and distribution) and a liability (political risk in markets sensitive to Chinese corporate influence).