The future of martial arts is more than just wax on, wax off. In a move that would make Mr. Miyagi proud, Karate Combat has landed an $18 million funding round to realize its vision of tech-enhanced full-contact sports.
Launched in 2018, Karate Combat mixes full-contact karate with immersive computer generated environments and extended reality (XR) technology using the Unreal Engine from Epic Games.
Investors joining fund lead Bitkraft Ventures in the raise include Delphi Digital, The Operating Group, Alpha Wave Global, Hashkey, RooxieXBT, and others. The Karate Combat league is sponsored by the HBAR Foundation, the group that supports the Hedera ecosystem and the Hedera Hashgraph network.
Karate Combat says the $18 million will go towards launching a Karate Combat "Up Only Gaming" app and a $KARATE token on the Ethereum and Hedera networks on May 10.
"We definitely wanted to complete the fundraising process. We had been observing the market for the past nine months and had a development pipeline in place for building the app," Karate Combat co-founder Robert Bryan told Decrypt. "Despite the company doing well financially, we wanted to ensure that we wouldn't need more funding in the future."
Bryan said the company had to be flexible with its timeline due to several setbacks over the last eight months, including the collapse of cryptocurrency exchange FTX, which prompted investors to vet their prospects more thoroughly.
In addition to next month's launch of the token and iOS app, an Android app will soon follow.
The main feature of their gaming model, Bryan said, is that players worldwide who use the app can allocate $KARATE tokens to their favorite fighters and boost the fighters' potential prize pools beyond their contracted pay. If their chosen fighter wins, the player earns more tokens. Tokens are not lost with a loss, however.
"Having upside based on the outcome of a fight is the biggest driver of fanaticism in all sports, and you can't do that without Web3, you can't do that without the tools that DeFi has developed in these other areas," Bryan said. "So we're utilizing them, and we think it will give us an incredible advantage over our competitors."
Karate Combat has already attracted audiences from more than 100 countries with 4.5 million followers and over 10 million views per event from its deals with major sports broadcasters, including Eurosport, Globo's Combate, BeIN Sports, CBS Sports, and ESPN Deportes, Bryan said.
He attributed the mainstream return of karate to the Netflix series "Cobra Kai," the spin-off of the "Karate Kid" franchise.
In January, Karate Combat made the leap to Web3 by becoming a DAO, or decentralized autonomous organization. A DAO is a business structure where control is spread out rather than hierarchical. DAOs use smart contracts, with members using governance tokens to vote on topics such as fund allocation and future events.
Bryan said that by shifting to a DAO, $KARATE token holders will be able to influence the league's direction, including future fights and events.
"This is the first crypto league," Bryan said. "The fans have input into absolutely every part of the league, from management, to who fights who, everything. There's no outside equity and no other places league assets are located—this is it—and that was all extremely attractive to us."