Novel Commerce Inc., a company that helps retailers, brands and content creators mint and sell nonfungible tokens, said it has raised $6 million in a seed round that values the company at $21 million.
The New York City-based startup, which goes by Novel, allows retailers to generate and sell the tokens, better known as NFTs, without having to do the coding themselves. Novel also plans to offer the companies it works with the ability to create content, merchandise and discounts for their online storefronts and for its NFTs.
The funding comes as brands have accelerated their experiments with Web3, a term referring to a decentralized internet that uses cryptocurrencies, blockchain and other technologies. Some have bought real estate in the metaverse, while others have sold NFTs in virtual worlds.
Novel isn’t the only company working on making it easier for brands to create and sell NFTs.
Shopify Inc.,
for instance, is testing a program that allows companies to mint and sell NFTs directly through its storefronts, said a spokeswoman. Novel itself is also available as an app on the Shopify platform.
Acquiring new customers online has meanwhile become more difficult and costly as consumer privacy protections complicate ad targeting and measurement. That has spurred some marketers to focus on forming closer bonds with their existing customers.
Brands are considering using NFTs to provide value to consumers as a way to extend the tokens’ impact beyond a one-off stunt, said
Mike Proulx,
vice president and research director at
Forrester Research Inc.
“We’re starting to see increasingly brands tie their NFT and/or metaverse-precursor experiments around loyalty programs, ‘plussing’ them up with additional access or things that you can get that make you feel special as a loyal customer,” Mr. Proulx said.
Novel aims to help marketers with that strategy, said
Anna Merzi,
co-founder and chief revenue officer. That could mean NFTs that grant their owners access to exclusive shopping experiences, for example, she said.
Novel’s clients include apparel retailer Everlane Inc. and Schnacks LLC, which operates snack marketer TBH. Novel is led by Ms. Merzi and
Roger Beaman,
its chief executive officer.
Everlane is considering using Novel and NFTs as a means to take preorders and establish a loyalty program, said
Michael Preysman,
founder of the apparel brand.
TBH is exploring using NFTs as a way to test new products with token holders or to sell them limited-edition products, said
Elena Guberman,
chief executive of the snack brand.
“We really see NFTs as another way to have a conversation with our community,” Ms. Guberman said.
Novel clients pay a subscription fee that begins at $99 a month for the software to create and sell NFTs. Novel typically receives 10% from each NFT sale from clients to consumers, as well as 1% to 2% on all subsequent transactions that occur in the secondary marketplace.
Venture-capital firm Lerer Hippeau Ventures led the funding with additional participation from VaynerFund, Costanoa Ventures,
Roth Martin,
Sugar Capital and other investors.
Write to Ann-Marie Alcántara at ann-marie.alcantara@wsj.com
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