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Frst and Fabric Ventures announce fellowship program for crypto entrepreneurs
VC funds Frst and Fabric Ventures are teaming up to create Le Crypto Fellowship. With this program, the two firms want to find the next 10 crypto entrepreneurs in France. And they think they might foster the most promising crypto startups if they don’t have any preconceived idea and team yet.
As Pierre Entremont from Frst writes in a Medium post, there are a lot of opportunities if you want to build the next crypto success, but few entrepreneurs are actively looking at this space.
“Nearly all crypto developers and entrepreneurs are already rich and therefore don’t step up their ambition,” he writes.
Blockchain development and DeFi projects are nearly always open source. Learning resources are available for free around the web. So it’s not that hard to get started and build a prototype, but you have to get started. Frst and Fabric Ventures think they can create the right framework to incentivize the next generation of entrepreneurs.
If you get accepted into the program, the two VC firms will hand you €100,000 in exchange for 7% of your company. Basically, this should cover one year of salary for one person in France with a salary of €50,000, €21,000 in employer contributions and €29,000 in expenses. You can be based in another country as long as it’s in the same time zone and you incorporate your company in France.
This way, you get to play around and think about an ambitious idea without feeling any financial pressure. You’ll join a Discord channel with other fellows and you’ll attend weekly Zoom meetings during the first few months. After that, Fabric Ventures and Frst partners will schedule regular office hours with you to check in on your progress.
If you end up creating a proper company and taking your idea to the next level, the fellowship may later ask to invest an additional €700,000 for a 20% stake in the company.
Candidates can apply until June 15. Le Crypto Fellowship isn’t looking for people who already have an idea or are only available part-time. But if you want to join as a team of two or three, you can. Instead of €100,000, you’ll get €200,000 or €300,000. Working as a team will probably help you remain motivated over the long haul.
This isn’t the first startup mentoring program. The Thiel Fellowship is arguably the most well-known. But Le Crypto Fellowship doesn’t limit itself to college dropouts and has a different focus. It’s going to be interesting to see if it pans out and if the VC firms will have a second, a third and a fourth batch down the road.
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Augmented reality NFT platform Anima gets backing from Coinbase
Augmented reality and non-fungible tokens, need I say more? Yes? Oh, well NFTs have certainly had their moment in 2021, but the question of what they do or what can be done with them has certainly been getting voiced more frequently as the speculative gold rush begins to cool off and people start to think more about how digital goods can evolve in the future.
Anima, a small creative crypto startup built by the founders of photo/video app Ultravisual, which Flipboard acquired back in 2014, is looking to use AR to shift how NFT art and collectibles can be viewed and shared. Their latest venture is an effort to help artists bring their digital creations to a bigger digital stage and help find what the future of NFTs looks like in augmented reality.
The startup has put together a small $500K pre-seed round from Coinbase Ventures, Divergence Ventures, Flamingo DAO, Lyle Owerko and Andrew Unger.
“As NFTs move away from being a more speculative market where it’s all about returns on your purchases, I think that’s healthy and it’s good for us specifically because we want to make things that are more approachable,” co-founder Alex Herrity says.
Their broader vision is finding ways for digital objects to interact with the real world, something that’s been a pretty top-of-mind concern for the AR world over the last few years, though augmented reality development has cooled more recently as creators have sunk into a wait-and-see attitude toward new releases from Apple and Facebook. Both the AR and NFT spaces are incredibly early, something Anima’s co-founders were quick to admit, but they think both spaces have matured enough that the gimmicks are out in the open.
“There’s a context shift that happens when you see AR as a vehicle to have a tactile relationship with something that you collected or that you see is a lifestyle accessory versus the common thing now where it’s a little bit more of an experiential gimmick,” co-founder Neil Voss tells TechCrunch.
The team has worked with a couple artists already as they’ve made early experiments in bringing digital art objects into AR and they’re launching a marketplace late next month based on ConsenSys’s Palm platform, where they hope to showcase more of their future partnerships.
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This crypto monitoring startup — ‘We’re bomb-sniffing dogs’ — just raised Series A funding
Solidus Labs, a company that says its surveillance and risk-monitoring software can detect manipulation across cryptocurrency trading platforms, is today announcing $20 million in Series A funding. It’s pretty great timing, given the various signals coming from the U.S. government just last week that it’s intent on improving its crypto monitoring efforts — such as the U.S. Treasury’s call for stricter cryptocurrency compliance with the IRS.
Of course, Solidus didn’t spring into existence last week. Rather, Solidus was founded in 2017 by several former Goldman Sachs employees who worked on the firm’s electronic trading desk for equities. At the time, Bitcoin was only becoming buzzier, but while the engineers anticipated different use cases for the cryptocurrency, they also recognized that a lack of compliance tools would be a barrier to its adoption by bigger financial institutions, so they left to build some.
Fast forward and Solidus today employs 30 people, has raised $23.75 million, and is in the process of doubling its head count to address growing demand. On Friday, we talked with Solidus’s New York-based co-founder and CEO Asaf Meir — one of those former Goldman engineers — about the company’s new round, which was led by Equity Partners, with participation from Hanaco Ventures, Avon Ventures, 645 Ventures, the cryptocurrencies derivative exchange FTX, and a sprinkling of government officials, including former CFTC chair Chris Giancarlo and former SEC commissioner Troy Paredes. We also talked about the kinds of crypto crimes that are on the rise. Excerpts from that chat follow, edited lightly for length.
TC: Who are your customers?
AM: We work with exchanges, broker dealers, OTC desks, liquidity providers and regulators — anyone who is exposed to the risk of buying and selling cryptocurrencies, crypto assets or digital assets, whatever you want to call them.
TC: What are you promising to uncover for them?
AM: What we detect, largely speaking, is volume and price manipulation, and that has to do with wash trading, spoofing, layering, pump and dumps and an additional growing library of crypto-native alerts that truly only exist in our unique market.
We had a 400% increase in inbound demand over 2020 driven largely by two factors, I think. One is regulatory scrutiny. Globally, regulators have gone off to market participants, letting them know that they have to ask for permission, not forgiveness. The second reason — which I like better — is the drastic institutional increase in appetite toward exposure for this asset class. Every institution, the first question they ask any executing platform is: ‘What are your risk mitigation tools? How do you make sure there is market integrity?’
TC: We talked a couple of months ago, and you mentioned having a growing pipeline of customers, like the trading platform Bittrex in Seattle. Is demand coming primarily from the U.S.?
AM: We have demand in Asia and in Europe, as well, so we will be opening offices there, too.
TC: Is your former employer Goldman a customer?
AM: I can’t comment on that, but I would say there isn’t a bank right now that isn’t thinking about how they’re going to get exposure to crypto assets, and in order to do that in a safe, compliant and robust way, they have to employ crypto-specific solutions.
Right now, there’s the new frontier — the clients we’re currently working with, which are these crypto-pure exchanges, broker dealers, liquidity providers and even traditional financial institutions that are coming into crypto and opening a crypto operation or a crypto desk. Then there’s the new new frontier; your NFTs, stablecoins, indexes, lending platforms, decentralized protocols and God knows what [else] all of a sudden reaching out to us, telling us they want to do the right thing, to ensure the users on their platform are well-protected, and that trading activities are audited, and [to enlist us] to prevent any manipulation.
TC: How does your subscription service work and who is building the tech?
AM: We consume private data from our clients — all their training data — and we then put it in our detection models, which we ultimately surface through insights and alerts on our dashboard, which they have access to.
As for who is building it, we have a lot of fintech engineers who are coming from Goldman and Morgan Stanley and Citi and bringing that traditional knowledge of large trading systems at scale; we also have incredible data scientists out of Israel whose expertise is in anomaly detection, which they are applying to financial crime, working with us.
TC: What do these crimes look like?
AM: When we started out, there was much more wholesale manipulation happening whether through wash trading or pump and dumps — things that are more easy to perform. What we’re seeing today are extremely sophisticated manipulation schemes where bad actors are able to exploit different executing platforms. We’re quite literally surfacing new alerts that if you were to use a legacy, rule-based system you wouldn’t be able to [surface] because you’re not really sure what you’re looking for. We oftentimes have an alert that we haven’t named yet; we just know that this type of behavior is considered manipulative in nature and that our client should be looking into it.
TC: Can you elaborate a bit more about these new anomalies?
AM: I’m conflicted about how much can we share of our clients’ private data. But one thing we’re seeing is [a surge in] account extraction attacks, which is when through different ways, bad actors are able to gain access to an account’s funds and are able in a sophisticated way to trade out of the exchange or broker dealer or custodian. That’s happening in different social engineering-related ways, but we’re able, through account deviation and account profiling, to alert the exchange or broker dealer or financial institution we’re working with to avoid that.
We’re about detection and prevention, not about tracing [what went wrong and where] after the fact. And we can do that regardless of knowing even personal identifiable information about that account. It’s not about the name or the IP address; it’s all about the attributes of trading. In fact, if we have an exchange in Hong Kong that’s experiencing a pump and dump on a certain coin pair, we can preemptively warn the rest of our client base so they can take steps to prepare and protect themselves.
TC: On the prevention front, could you also stop that activity on the Hong Kong exchange? Are you empowered by your clients to step in if you detect something anomalous?
AM: We’re bomb-sniffing dogs, so we’re not coming to disable the bot. We know how to take the data and point out manipulation, but it’s then up to the financial institution to handle the case.
Pictured above: Seated left to right is CTO Praveen Kumar and CEO Asaf Meir. Standing is COO Chen Arad.
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Decentralized Komorebi Collective launches to back female and nonbinary crypto founders
As decentralized currencies have taken off in recent months, there’s been renewed attention around DAOs, or Decentralized Autonomous Organizations, as a means of bringing together groups of investors who can deploy capital as a unit while voting collectively on those investments. In the spirit of blockchain, they aim to bring greater transparency to investment decision-making.
A number of high-profile DAOs have launched in recent months as the fervor for crypto mania increased. Komorebi Collective, launching today, is a new organization founded by women in the blockchain space that will be making investments exclusively in “exceptional female and nonbinary crypto founders,” founding member Manasi Vora tells TechCrunch.
The group is comprised of a number of core team members largely assembled from the crypto nonprofit she256 and the organization Women in Blockchain, including Vora, Eva Wu, Kristie Huang, Medha Kothari and Kinjal Shah, who will collectively do most of the heavy lifting behind finding and presenting investments to the group. Other hand-selected members who committed a minimum of $5,000 USD will likely have a lighter commitment.
Each investment will be voted on by all the collective’s key signers, some 36 in total, the majority of whom are female.
“DAOs level the hierarchy of a venture fund by ensuring everyone is going to have a seat at the table,” says Shah, who is also an investor at crypto VC firm Blockchain Capital. “We are very careful in approaching the backers that are really mission-aligned.”
Other members of the DAO include firms like Kleiner Perkins, Mechanism Capital, Dragonfly Capital, IDEO CoLab Ventures and Stacks Accelerator alongside a number of individuals and founders who work at firms like Twitter, Coinbase, Skynet Labs, Celo Labs and Gitcoin.
The organization itself is built on the Syndicate Protocol, a project that shares some of Komorebi Collective’s backers.
The group hopes the structure of their organization will be able to take a mission-driven approach that improves diversity in the crypto space while proving the sustainability of the DAO model. Despite an explosion in startup investments in the past year, women-led startups received just 2.3% of venture dollars invested in 2020, a study in HBR found.
“There’s so much more room to grow when it comes to female founders getting funding and I want to be part of the solution,” Shah tells TechCrunch.
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Crypto and blockchain must accept they have a problem, then lead in sustainability
As the price of bitcoin hits record highs and cryptocurrencies become increasingly mainstream, the industry’s expanding carbon footprint becomes harder to ignore.
Just last week, Elon Musk announced that Tesla is suspending vehicle purchases using bitcoin due to the environmental impact of fossil fuels used in bitcoin mining. We applaud this decision, and it brings to light the severity of the situation — the industry needs to address crypto sustainability now or risk hindering crypto innovation and progress.
The market cap of bitcoin today is a whopping $1 trillion. As companies like PayPal, Visa and Square collectively invest billions in crypto, market participants need to lead in dramatically reducing the industry’s collective environmental impact.
As the price of bitcoin hits record highs and cryptocurrencies become increasingly mainstream, the industry’s expanding carbon footprint becomes harder to ignore.
The increasing demand for crypto means intensifying competition and higher energy use among mining operators. For example, during the second half of February, we saw the electricity consumption of BTC increase by more than 163% — from 265 TWh to 433 TWh — as the price skyrocketed.
Sustainability has become a topic of concern on the agendas of global and local leaders. The Biden administration rejoining the Paris climate accord was the first indication of this, and recently we’ve seen several federal and state agencies make statements that show how much of a priority it will be to address the global climate crisis.
A proposed New York bill aims to prohibit crypto mining centers from operating until the state can assess their full environmental impact. Earlier this year, the U.S. Securities and Exchange Commission put out a call for public comment on climate disclosures as shareholders increasingly want information on what companies are doing in this regard, while Treasury Secretary Janet Yellen warned that the amount of energy consumed in processing bitcoin is “staggering.” The United Kingdom announced plans to reduce greenhouse gas emissions by at least 68% by 2030, and the prime minister launched an ambitious plan last year for a green industrial revolution.
Crypto is here to stay — this point is no longer up for debate. It is creating real-world benefits for businesses and consumers alike — benefits like faster, more reliable and cheaper transactions with greater transparency than ever before. But as the industry matures, sustainability must be at the center. It’s easier to build a more sustainable ecosystem now than to “reverse engineer” it at a later growth stage. Those in the cryptocurrency markets should consider the auto industry a canary: Carmakers are now retrofitting lower-carbon and carbon-neutral solutions at great cost and inconvenience.
Market participants need to actively work together to realize a low-emissions future powered by clean, renewable energy. Last month, the Crypto Climate Accord (CCA) launched with over 40 supporters — including Ripple, World Economic Forum, Energy Web Foundation, Rocky Mountain Institute and ConsenSys — and the goal to enable all of the world’s blockchains to be powered by 100% renewables by 2025.
Some industry participants are exploring renewable energy solutions, but the larger industry still has a long way to go. While 76% of hashers claim they are using renewable energy to power their activities, only 39% of hashing’s total energy consumption comes from renewables.
To make a meaningful impact, the industry needs to come up with a standard that’s open and transparent to measure the use of renewables and make renewable energy accessible and cheap for miners. The CCA is already working on such a standard. In addition, companies can pay for high-quality carbon offsets for remaining emissions — and perhaps even historical ones.
While the industry works to become more sustainable long term, there are green choices that can be made now, and some industry players are jumping on board. Fintechs like Stripe have created carbon renewal programs to encourage its customers and partners to be more sustainable.
Companies can partner with organizations, like Energy Web Foundation and the Renewable Energy Business Alliance, to decarbonize any blockchain. There are resources for those who want to access renewable energy sources and high-quality carbon offsets. Other options include using inherently low-carbon technologies, like the XRP Ledger, that don’t rely on proof-of-work (which involves mining) to help significantly reduce emissions for blockchains and cryptofinance.
The XRP Ledger is carbon-neutral and uses a validation and security algorithm called Federated Consensus that is approximately 120,000 times more energy-efficient than proof-of-work. Ethereum, the second-largest blockchain, is transitioning off proof-of-work to a much less energy-intensive validation mechanism called proof-of-stake. Proof-of-work systems are inefficient by design and, as such, will always require more energy to maintain forward progress.
The devastating impact of climate change is moving at an alarming speed. Making aspirational commitments to sustainability — or worse, denying the problem — isn’t enough. As with the Paris agreement, the industry needs real targets, collective action, innovation and shared accountability.
The good news? Solutions can be practical, market-driven and create value and growth for all. Together with climate advocates, clean tech industry leaders and global finance decision-makers, crypto can unite to position blockchain as the most sustainable path forward in creating a green, digital financial future.
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Radical Ethereum entrepreneurs are redefining what ‘rape kit’ means
Their investors call them disruptive innovators. Detractors like North Carolina Attorney General Josh Stein call them “dirty scammers.” But Leda Health co-founders Madison Campbell and Liesel Vaidya think of themselves as advocates for sexual assault survivors.
Among the feminists leveraging Ethereum for subversive use cases, Leda Health’s do-it-yourself evidence-collecting kit for sexual assault survivors is among the most ambitious projects. So far, 16 members of Congress condemned Leda Health’s upcoming kits, which Michigan Attorney General Dana Nessel described as “shamelessly trying to take financial advantage of the #MeToo movement.” Leda Health’s DIY kit was nearly banned in New Hampshire and Utah before it even launched. But that hasn’t deterred Campbell and Vaidya.
Campbell is a survivor herself, so she knows the reasons people don’t immediately go to police after an assault. In her case, by the time she’d grappled with the trauma and was ready to come forward, it would have just been her word against his.
“There are also rape kits in every state that have been lost,” Campbell said. “The sheer amount of sexual assault survivors that reach out to me and tell me this product could change their lives, that’s what keeps me going.”
As such, Campbell said her startup plans to launch these kits in fall 2021, partnering with several universities for a beta rollout. Support services, to complement the take-home kits, include therapy and transformative justice groups run by licensed facilitators.
“We plan on being a business-to-business company, for universities and corporations and the military, partners like that,” Campbell said. “Our goal is for institutions to eventually pay for products and services to help these students. We know it will be difficult, that we’ll need a lot of case studies showing whether this helps… including healing work with people who committed harm about accountability and boundaries, to end that cycle of harm.”
Starting by offering institutions free therapy services and resources should seem like a no-brainer. Yet critics argue these kits give survivors false hope, because they are less effective in court than rape kits managed by law enforcement and related clinics. On the other hand, every year tens of thousands of rape kits aren’t tested by police.
Vaidya said Leda Health’s Ethereum-powered mobile app gives survivors the choice to document their own accounts, using blockchain technology for time-stamping evidence collected in the kit, which puts power back in survivors’ hands.
“We’re not in the business of proving consent. We’re just in the business of providing resources,” Vaidya said.
According to Chief Deputy District Attorney John Henry, in California’s Riverside County, this commercial product will be the first of its kind. He said it’s too soon to tell whether this could help survivors who are, for whatever reason, reluctant to immediately turn to law enforcement. Timing is also a factor. If the survivor is unable to get to a clinic promptly after the assault, there won’t be any biological evidence left to collect.
Love them or hate them, there’s no denying these blockchain-savvy entrepreneurs are challenging the status quo in a space where women are horrifically underserved.
“Nurses and police have some degree of experience and training on what to ask, where to follow up, what information is important. That is information the general public doesn’t have. As a prosecutor, I’d rather have those statements, and the additional investigation that goes on, done by law enforcement and medical personnel,” Henry said. “If a kit is collected in a way that is inconsistent with regulations and best practices, it’s not inadmissible. But that is something the jury would need to take into account… I can see the benefit of some type of evidence, as opposed to none. I can’t give a definitive opinion yet about whether it [Leda Health] is a good idea or a bad idea.”
A rape kit alone, of any variety, cannot result in a conviction or expulsion. It is merely a tool used as part of a broader investigation. Even so, the idea of survivors managing their own data has sparked vehement backlash.
“Back in 2019, our office was broken into,” Vaidya said. “We’ve also documented potential investors engaging with social media posts calling for us to be jailed.”
Campbell added they are now both subjected to routine online harassment.
“We also take Ubers home from meetings or offices ever since 2019, because our lawyers told us not to take the subway. We might be followed,” Campbell said.
The way this controversial kit works is a nondescript box comes with plastic bags, swabs and instructions all labeled with QR codes. Users download Leda Health’s app and are prompted to type in information while they save evidence of the assault, such as ripped panties, in separate Ziploc bags.
“The blockchain creates a sense of accountability, because these records can’t be changed,” Vaidya said. “There’s only myself and perhaps one more person in the company that has access to the data and it’s encrypted…there are access locks regarding when and how and we might access that data if compelled to by a legal authority.”
Leda Health outsources most of the tricky Ethereum software support to the blockchain startup Deqode. Deqode engineer Shivam Bohare said Leda Health’s system relies on Ethereum infrastructure services from Blocknative, a company that attracted investment from Coinbase Ventures, and Infura, a startup partially owned by Ethereum co-founder Joe Lubin. The encrypted data and profile are attached to a specific user account, not any self-custodied token, so the blockchain aspects of this app all occur under the hood. Users don’t need to know anything about Ethereum.
“Access to the user data is guarded using strict authorization,” Bohare said. “Even the users don’t have access to their own data (without proper authorization from Leda Health administration) once it’s been uploaded to the cloud.”
Unlike a kit administered by police, survivors can physically hold the kit until they turn it over to lawyers or authorities, rather than hoping their case isn’t one of the thousands that gets lost in the system. Plus, the DIY kit, combined with the records stored through the app, can be used for mediation outside of court, like group therapy sessions.
“People tend to forget that self-collected evidence is extremely common in the U.S. court system and analyzed for admissibility and other issues on a regular basis,” said attorney Jiadai Lin, who provides outside counsel to Leda Health.
Indeed, rape kits donated by another private manufacturer were reportedly used in April 2020 in Monterey County, California, under a temporary process developed for the pandemic.
“I believe survivors should have the right to gather information about their own bodies on their own terms, and entrepreneurs should have the right to try their hand at innovation,” Lin said. “In my view, legislative efforts to ban the product have been excessively restrictive. And that makes me feel even more strongly about standing behind Leda Health.”
Critics cast the startup’s entrepreneurial approach as greedy opportunism. Leda Health investors like Romeen Sheth, a Harvard law school alum and former co-president of the Harvard Association for Law and Business, invested in the startup so far because he believes the for-profit strategy can complement nonprofit organizations already working in this space. So far, Leda Health has raised roughly $2 million.
“Disruptive innovation in any industry is never comfortable; it never starts out as something that the incumbents are pleased with,” Sheth said. “I’m bullish on products and services that keep users as the top priority… I’m interested in investing in forward progress, not in maintaining the status quo. Leda Health defines that ethos and I’m hopeful their efforts make sexual trauma and sexual harassment less embarrassing, painful and traumatic.”
Now, as Campbell and Vaidya finish work on the prototype, Leda Health already started offering support groups for sexual assault survivors, led by licensed therapists.
“We have two groups going right now and another five starting in May,” Vaidya said.
Love them or hate them, there’s no denying these blockchain-savvy entrepreneurs are challenging the status quo in a space where women, in particular, are horrifically underserved by current resources.
“For sexual assault victims, the cost of the status quo, which includes under-reporting, a massive kit processing backlog and general lack of support services, is very high. Leda is demonstrating there are innovative low-risk solutions available,” said investor Duriya Farooqui. “Second, among the reasons an assault victim may not immediately report is because the procedure for collecting evidence via a rape kit can feel invasive and in itself can add to trauma. Leda wants to provide options.”
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ZenGo raises $20 million for its secure crypto wallet app
ZenGo, a mobile app to manage your cryptocurrencies, has raised a $20 million Series A funding round led by Insight Partners. ZenGo is a non-custodial wallet, which means that the company doesn’t manage your crypto assets for you — you remain in control.
Other investors include Distributed Global and Austin Rief Ventures. Existing investors Benson Oak, Samsung Next, Elron, Collider Ventures, FJ Labs and others also participated in today’s funding round.
What makes ZenGo different from other wallet apps is that the company is trying to build something that is more secure than your average crypto wallet while remaining simple to use and understand. It competes with other non-custodial wallets, such as Coinbase Wallet (not Coinbase.com), Argent, etc.
In particular, ZenGo is based on multiparty computation (MPC). When you first create your wallet, ZenGo generates multiple secrets that are stored and encrypted in different ways. It means that the company can’t access your tokens directly and you can recover your wallet if you lose your phone.
Other crypto companies focused on infrastructure and enterprise clients have also opted for MPC as their security model. Fireblocks, a company that has recently raised $133 million, is one example.
But ZenGo is building a consumer app. In 2020, the company has processed more than $100 million in crypto transactions from 100,000 users. ZenGo has reached the same milestone in the first three months of 2021 and added another 100,000 users.
You can browse DeFi projects through ZenGo and access savings pools. The startup takes a cut on these investments.
With today’s funding round, ZenGo plans to expand with the same philosophy in mind. You can expect support for more chains and assets, more partnerships and options to buy cryptocurrencies and convert them to fiat money, etc.
The company recently announced plans to launch a debit card. This way, users will be able to convert their crypto assets and then spend them wherever Visa cards are accepted. In other words, ZenGo is building a crypto super app with a focus on security.
Image Credits: ZenGo
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NBA Top Shot maker Dapper Labs is now worth $2.6 billion thanks to half of Hollywood, the NBA and Michael Jordan
From the early success of Crypto Kitties to the explosive growth of NBA Top Shot, Dapper Labs has been at the forefront of the cryptocurrency collectible craze known as NFTs.
Now the company is reaping the benefits of its trailblazing status with a new $305 million financing led by some of the biggest names in Hollywood, sports and investing.
The new round values the company at a whopping $2.6 billion, according to multiple media reports, and comes at a time when NFTs have captured the popular imagination.
Leading the company’s financing was Coatue, the financial services firm that’s behind many of the biggest later-stage tech deals. But heavy hitters from the entertainment world also took their cut — these are folks like NBA legend Michael Jordan as well as current players and funds including Kevin Durant, Andre Iguodala, Kyle Lowry, Spencer Dinwiddie, Andre Drummond, Alex Caruso, Michael Carter-Williams, Josh Hart, Udonis Haslem, JaVale McGee, Khris Middleton, Domantas Sabonis, Klay Thompson, Nikola Vucevic and Thad Young and Richard Seymour’s 93 Ventures.
Entertainment and music heavyweights including Ashton Kutcher and Guy Oseary’s Sound Ventures, Will Smith and Keisuke Honda’s Dreamers VC, Shawn Mendes and Andrew Gertler’s AG Ventures, Shay Mitchell and 2 Chainz also bought in on the action.
And from the venture world comes other strategic investors like Andreessen Horowitz, The Chernin Group, USV, Version One and Venrock.
The company said it would use the funds to continue building out NBA Top Shot and expanding the updated digital trading card platform to other sports and a broader creator community.
Top Shot has already notched over $500 million in sales for its animated trading cards featuring things like LeBron James dunking, and the sky (at least for now) is seemingly the limit for the collectible applications of blockchain.
It’s like the one thing that cryptocurrency can do really well and it’s been embraced far beyond the world of sports collectibles. The recent $69 million sale of a digital piece of art at Christies also marks a watershed moment for the art world.
“NBA Top Shot is successful because it taps into basketball fandom — it’s a new and more exciting way for people to connect with their favorite teams and players,” said Roham Gharegozlou, CEO of Dapper Labs. “We want to bring the same magic to other sports leagues as well as help other entertainment studios and independent creators find their own approaches in exploring open platforms. NFTs unlock a new model for monetization that benefits the fans much more than advertising or sponsorships.”
Powering the Top Shot system and Dapper Labs’ other offerings is a new blockchain protocol called Flow, which purports to handle mainstream consumer applications at scale, and can support mass adoption.
Flow also allows for transactions using fiat currency and credit cards, and provides a much needed ease of cryptocurrency, and can keep customers safe from the fraud or theft common in cryptocurrency systems, according to a statement from Dapper Labs.
Flow enables NFT marketplaces and other decentralized applications that need to scale to handle mainstream demand without extremely high transaction costs (“gas fees”) or environmental concerns, the company said.
“NBA Top Shot is one of the best demonstrations we’ve seen of how quickly new technology can change the landscape for media and sports fans,” said Kevin Durant, co-founder of Thirty Five Ventures. “We’re excited to follow the progress with everything happening on Flow blockchain and use our platform with the Boardroom to connect with fans in a new way.”
Already companies like Warner Music Group, Ubisoft, Warner Media and the UFC, as well as thousands of third-party developers, artists and other creators, are using the Flow mainnet to sell collectible cards and develop custodial wallets.
Additional investors in the round include: MLB players like Tim Beckham and Nolan Arenado; NFL players Ken Crawley, Thomas Davis, Stefon Diggs, Dee Ford, Malcom Jenkins, Rodney McLeod, Jordan Matthew, Devin McCourty, Jason McCourty, DK Metcalf, Tyrod Taylor and Trent Williams; team ownership, including Vivek Ranadivé (Kings); and notable sports investors Bolt Ventures.
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NFTs could bridge video games and the fashion industry
Non-fungible tokens (NFTs) offer new ways for consumers to collect, wear and trade fashion online, and now that most fashion shows have scaled back or gone virtual, they may become an important tool for the industry.
Because some of the most profitable NFTs are produced by celebrities with teams, it makes sense that music corporations, fashion brands and designers are venturing into the NFT market as well. Just this month, sneaker brand RTFKT Studios garnered $3.1 million in seven minutes by selling crypto collectibles. In December 2020, NFT startup Enjin partnered with Netherlands-based fashion house The Fabricant on a virtual collection. Real-life fashion brands use NFTs for marketing in virtual worlds like Minecraft, plus several Atari and Microsoft video games.
The fundamental value NFTs offer to bridge virtual fashion items with video games is the option to secure custody of the item for use in other games or mobile apps.
“Brands are coming up with some creative solutions because the pandemic is persistent, and fashion is something that is so close to our identities,” said Bryana Kortendick, Enjin’s VP of operations and communications. “You can snap a photo of yourself wearing your Atari-branded NFTs. You’ll also be able to wear them in video games.”
Breakout NFT star Beeple said he imagines a future where fashion NFTs could be redeemed for specific items in physical stores, especially at luxury retailers like his former client Louis Vuitton.
“You can relate NFTs to clothing in new and interesting ways,” he said. “This will be seen as the next chapter of digital art history. This is a continuation of digital art history that started decades ago, by that I mean art made on a computer and distributed through the internet.”
Fashion designers like Schirin Negahbani are already creating NFTs that represent actual clothing. Precisely because multimillion-dollar NFT sales are breaking records, spectators have been prompted to question the role speculative trading plays in this trend.
Textile designer Amber J. Dickinson says fashionable NFTs shouldn’t primarily be viewed as speculative trading opportunities. “The way I think fashion translates to the digital world is to view an NFT as a collectible piece of the garment for history,” said Dickinson, known for hand-made silk scarves and her work with Alexander McQueen. “I would only buy art as a piece that I liked. Whether digital or in the real world, I don’t take an investor’s point of view.”
There are many fashion fans who disagree with Dickinson, preferring to invest through assets like Birkin bags. They may have a different approach to NFTs. The DIGITALAX crypto fashion platform, for example, is being built with a plethora of trading features. As for Dickinson, she said she is still looking for her tribe of crypto-savvy artists on Twitter.
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Extra Crunch roundup: AI eats fintech, fundraising visas, no-code transition tips, more
Most American retail banks are designed the same way: Customers must pass several desks set aside for loan and mortgage officers before they can talk to a customer representative.
I only step inside a bank a few times each year, but even pre-pandemic, I can’t remember the last time I saw someone sitting at one of those desks. Everyone I know who’s obtained a home or business loan in the recent past started with an online application process.
For this morning’s column, Alex Wilhelm interviewed Dave Girouard, CEO of Upstart, an AI-powered fintech lender that expects to see growth increase 114% this year.
A forecast like that suggests that retail banks have gotten comfortable with using automated tools to calculate risk, which may help explain all the empty desks at my local branch.
“If Upstart hits its 2021 numbers, we will be able to read into them broader adoption of AI among old-guard firms,” says Alex.
According to PitchBook, investors are also more bullish on AI: Q4 2020 saw record funding for AI and ML startups, and exit totals are increasing as well.
I wouldn’t mind adding a gently used desk to my home office; perhaps I should call my bank and see if they have one to spare.
Thanks very much for reading Extra Crunch. Have a great weekend!
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
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A crypto company’s journey to Data 3.0
Image Credits: dowell (opens in a new window) / Getty Images
Data is a gold mine for a company. If managed well, it provides the clarity and insights that lead to better decision-making at scale, in addition to an important tool to hold everyone accountable.
However, most companies are stuck in Data 1.0.
Dear Sophie: What type of visa should we get to fundraise in Silicon Valley?
Image Credits: Bryce Durbin/TechCrunch
Dear Sophie:
A friend and I founded a tech startup last year. Like a lot of other startups, we’re looking for funding.
Should we come to Silicon Valley to meet with venture capitalists?
How should we begin that process? What type of visa should we get and how easy is it to get?
—Logical in Lagos
To solve all the small things, look to everyday Little AI
Image Credits: Yuichiro Chino / Getty Images
Why are developers still solving everyday pain points with manual, archaic processes, as opposed to employing “Little AI”?
There are millions of everyday use cases for AI, where technology is empowered to learn and decide on a course of action that offers the best outcome for consumers and companies alike.
How to recruit data scientists without paying top dollar
Image Credits: Thomas Barwick (opens in a new window) / Getty Images
The increasing demand for AI and data science experts, driven in part by the pandemic’s economic impact, is showing no sign of abating.
Many employers are failing to identify viable job candidates, much less interviewing or hiring them. What’s holding them back?
Often, it’s a poorly drafted job posting.
3 steps to aid the transition to becoming a no-code company
Image Credits: Korrawin / Getty Images
No-code is changing how organizations build and maintain applications.
It democratizes application development by creating “citizen developers” who can quickly build out apps that meet their business-facing needs in real time, realigning IT and business objectives by bringing them closer together.
How can your company get ahead of the trend?
No taxation without innovation: The rise of tax startups
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The idiosyncrasies of sales taxes are a burden on small- and medium-sized businesses, but a new legion of startups is emerging to help companies manage the intricacies of cross-jurisdictional taxes.
Snowflake gave up its dual-class shares: Should you?
Image Credits: VectorInspiration / Getty Images
Some founders and investors argue that these preferred shares protect them from the whims of the market, but the perspective isn’t universally accepted.
Dual-class shares are a controversial governance structure, and some wonder if they are setting up an unfair playing field by allowing a cabal to wield outsized power.
So why would Snowflake give up such a powerful tool?
MaaS transit: The business of mobility as a service
Image Credits: Bryce Durbin
As transit agencies seek to win back riders, a flurry of platforms — some backed by giants like Uber, Intel and BMW — are offering new technology partnerships.
Whether it’s bundling bookings, payments or just trip planning, startups are selling these mobility-as-a-service (MaaS) offerings as a lifeline to make transit agencies the backbone of urban mobility.
What eToro’s investor presentation and $10B valuation tells us about Robinhood
Image Credits: Nigel Sussman (opens in a new window)
Israeli consumer stock-trading service eToro is going public in the United States via a SPAC. One thing that points to?
Trading platforms are being valued like high-margin video games.
The global inequity in venture backing is staggering
Image Credits: Nigel Sussman (opens in a new window)
I knew African founders lacked the same access to capital as entrepreneurs based in Europe or the United States, but the numbers are far less favorable than I thought.
According to Dauda Barry, CEO of Adaplay Esports, African startups have raised $500 million so far in 2021. If that trend continues, he estimates that the region’s tech companies will exceed the $1.4 billion they raised in 2020.
For perspective: “Stripe raised more yesterday than Barry had reported for the entire African continent this year,” Alex Wilhelm noted in today’s column.
Digging deeper, he pulled numbers from Crunchbase and PitchBook to track VC activity in Africa over the last three months. Once he filtered private equity funding from nonequity investments, the numbers were “staggering.”
“I am surprised that more VCs aren’t investing in Africa,” says Alex. “It smells like investing arbitrage.”
Farmland could be the next big asset class modernized by marketplace startups
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Companies that help farmers raise money for agricultural development projects are revolutionizing the way farm and forestland are acquired, developed and commercialized across the United States.
While private equity has gotten a lot of press for expanding the size of their farmland investments, those investments are still dwarfed by the size of the potential farm industry in the U.S., meaning there’s still plenty of opportunity for investors to provide additional capital.
The NFT market is just getting started, but where is it headed?
Image Credits: Beeple (opens in a new window) under a CC BY 4.0 (opens in a new window) license.
The crypto art craze might seem silly and expensive, but it could empower artists from emerging economies and underrepresented groups to access the global art market in ways that they couldn’t before.
Can it outlive the hype?
Olo raises IPO range as DigitalOcean sees possible $5B debut valuation
Image Credits: jayk7 (opens in a new window) / Getty Images
That Olo raised its IPO price is not a huge surprise, given the software company’s rapid growth and profits. In the case of DigitalOcean, we have more work to do as its approach to growth is a bit different.
Stripe’s epic new valuation and the value-capture gap between public and private markets
Image Credits: Nigel Sussman (opens in a new window)
Stripe’s $600 million round values the payments and banking software company at $95 billion, near the top end of the valuation range at which the company was said to be raising funds back in November 2020.
Sadly, Stripe is still being coy with growth metrics. The Exchange digs in, no matter how vague.
Julia Collins and Sarah Kunst outline how to build a fundraising process
Julia Collins, the first Black woman to co-found a venture-backed unicorn, and investor Sarah Kunst offer fundraising pointers on Extra Crunch Live.
Kunst says good design is critical, but:
If you’re not a graphic designer, then any incremental minute that you’re spending on trying to make your deck pretty is a waste of time. You need to be focusing on content. Hire somebody, pay them a tiny bit of money to be able to do a nice graphics pass on your deck, and it’s going to make it a lot easier for people to to get the information that you need them to know.
How nontechnical talent can break into deep tech
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Startup hiring processes can be opaque, and breaking into the deep tech world as a nontechnical person seems daunting. This column offers tactical advice for finding, reaching out to, cultivating relationships with and working at deep tech companies as a nontechnical candidate.
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