Pudgy Penguins raised $9M to create an IP brand

Illustration: Shoshana Gordon/Axios

The company behind the NFT brand Pudgy Penguins has raised a cool $9 million in a round led by early-stage investors 1kx.

Why it matters: It’s an investment in the idea that a non-fungible token brand could be the basis for larger intellectual property plays, such as when toy lines sometimes launch major movie and TV franchises.

Catch up fast: Luca Netz acquired the right to steward the overall Pudgy Penguins brand in 2022. At that point, an untenable rift had developed between the owners of the NFTs (who call themselves “the huddle” collectively) and the group that originally created the Pudgy Penguins.

  • From the beginning Netz, now CEO, has built his strategy around the idea that the penguins could be more than a series of images. That life could be breathed into them.
  • Another NFT line, The Forgotten Runes Wizard Cult, has a similar strategy.

What they’re saying: “Pudgy Penguins is more than just an NFT project — it is a transcendent IP brand that is providing a community of both crypto-native and non-crypto native consumers with enjoyable products, experiences, and content,” Netz said in a statement.

State of play: It’s already released a line of clothing that goes from hoodies to sunglasses. Coming soon: Pudgy Toys — real analog toys based on Pudgy Penguin IP.

How it works: Pudgy Penguins is a profile picture (PFP) NFT brand that has given birth to other lines of NFTs, such as Lil Pudgy’s.

  • Using programmatic software, the creators of Pudgy Penguins created 8,888 images of cute penguins, with all sorts of variations (like eyeglasses or hats or clothing).
  • For a moment there, the penguins were very popular as profile pictures, especially on Twitter.

Be smart: Penguin owners can hold out the hope that one of their penguins might be picked as a character in some production Netz’s company will create. If that happens, it should sharply increase the value of that NFT, in theory.

  • Over all, if any Pudgy Penguins-branded project does well, it should lift the value of all the NFTs, at least somewhat.

Of note: Other participants in the round included Big Brain Holdings, Kronos Research and the founders of LayerZero Labs (which built technology that Tristero makes use of).

The bottom line: The price paid for the least attractive Pudgy Penguins has basically doubled since Netz took over, and volume has been much more steady through 2023.

  • That said, the huddle is waiting on its first major pudgy-branded production.

Editor’s note: This story has been corrected to state that “the huddle” is the name by which Pudgy Penguins NFT owners call themselves, not “the igloo.”

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