Cent, the platform that Jack Dorsey used to sell his first tweet as an NFT, raises $3M

Cent was founded in 2017 as an ad-free creator network that allows users to offer each other crypto rewards for good posts and comments — it’s like gifting awards on Reddit, but with Ethereum. But in late 2020, Cent’s small, San Fransisco-based team created Valuables, an NFT market for tweets, and by March, the small blockchain startup was thrown a serendipitous curveball.

“We just wrapped up for the day, and I was about to go eat dinner, and all these people started texting me,” remembers CEO Cameron Hejazi. Then, he realized that Twitter CEO Jack Dorsey had minted Twitter’s first ever Tweet through Cent’s Valuables application. “I was basically like, mildly shivering for the rest of the night. The whole team, we were like, ‘Okay, battle stations, prepare to get hacked!’”

Dorsey ended up selling his NFT for $2.9 million, and he donated the proceeds to Give Directly’s Africa Response fund for COVID-19 relief. But for Cent, it was as if the small company had just been handed a free marketing campaign. Now, about five months later, Cent is announcing a $3 million round of seed funding with investors like Galaxy Interactive, former Disney chairman Jeffrey Katzenberg, Will.I.Am, and Zynga founder Mark Pincus.

On Valuables, anyone on the internet can place an offer on any tweet, which then makes it possible for someone else to make a counter-offer. If the author of the tweet accepts an offer (logging into Valuables requires you to validate your Twitter account), then Cent will mint the tweet on the blockchain and create a 1-of-1 NFT.

The NFT itself contains the text of the tweet, the username of the creator, the time it was minted, and the creator’s digital signature. The NFT also includes a link to the tweet, though the linked content lives outside the blockchain.

There’s nothing proprietary about minting tweets as NFTs — another company could do the same thing that Cent is doing. Even Twitter itself has recently dabbled in giving away free NFT art, though it hasn’t tried to sell actual tweets as NFTs like Cent. Still, Hejazi sees Dorsey’s use of Cent like an endorsement — he thinks it would be difficult for Twitter to shut them down, since Dorsey made $2.9 million on the platform himself. After all, Dorsey chose Cent instead of taking a screenshot of his first tweet, minting the .JPG as an NFT, and posting it on a larger NFT platform, like OpenSea.

“We’ve spoken with people at Twitter. I’m positive that we have a healthy relationship going,” Hejazi said (Twitter declined to comment on or confirm whether that’s true). “We thought about applying this approach to other social platforms, like Instagram and TikTok, but we hypothesized that this is particularly suited for Twitter, because it’s a conversation platform, and it’s where all of the crypto people are actually living.”

With Cent’s seed funding Hejazi hopes to continue building the platform. The company’s goal is to enable anyone creative to make an income through the use of NFTs — that means developing tools to make it simpler for its users to mint NFTs, but also, building out its existing creator-focused social network. The content people post on Cent is usually creative work, like art and writing, rather than short posts — it’s closer to DeviantArt than it is to Reddit. These are lofty goals for a $3 million seed funding round, but there are aspects of Cent’s Beta platform that make it promising.

“There’s already value in what we post on social media. It’s just being proxied through ad dollars, and it doesn’t have to be the case that there’s so much wealth concentration in a single entity. We can work toward a system that decentralizes that wealth,” said Hejazi. “These networks as they exist have monopolies on distribution — you can’t take your Twitter audience, download it as a .CSV, and send them all an email.”

A screenshot of Cent’s social platform.

In addition to independent distribution lists, Hejazi wants to move away from the ad-supported internet. He references Substack as an example of a company where the creator has control of their list, and at the same time, the platform can remain ad-free, since the money that propels it comes from the users who pay to subscribe to newsletters (and also, venture capital helps).

But Cent does something different by allowing users to essentially invest in creators who they think have the potential to take off on their platform.

Users can “seed” a post, which is how you subscribe to a creator participating on the creatives side of Cent’s platform. As the seeder, you pay a set fee of at least one dollar per month. There’s an incentive to support up-and-coming creators on the platform, because seeders get a portion of the creators’ future profit — it’s like making a bet on them that they will continue to make great content in the future. Five percent of profits go toward Cent, but the remaining 95% is split 50/50 between the creator and all of their past seeders. Participating on this platform would allow creators to network and show support for one another, but doesn’t prevent them from more directly monetizing their work on other creator platforms, like Patreon.

In addition to seeding posts, users can also “spot” other people’s posts — Cent’s version of a “like” button. Each “spot” is the equivalent of one cent from the user’s crypto wallet. Cent’s argument is that getting 1,000 likes on a post on other platforms yields nothing but a vague sensation of social clout. But on Cent, if a user gets 1,000 “spots,” that’s $10. Still, a project like this can only work if enough people use the platform.

“When we started Cent, we chose cryptocurrencies because we loved the idea of someone being able to earn money with nothing more than their creativity and a crypto address,” Hejazi said. “Over time, we’ve found it to be limiting as a payment type — very few people actually own it and have it ready to spend. We’re working on ways to make payments to creators using Cent easier, and are exploring both crypto-native and non-crypto options.”

This mindset echoes other NFT startups like Yat, which allows payments via credit card as part of its “progressive decentralization” model. So much of these companies’ success depends on public buy-in toward an eventual decentralized, blockchain-based internet. But until then, companies like Cent will continue to experiment in reimagining how creatives can get paid online.

#apps, #author, #blockchain, #ceo, #chairman, #computing, #cryptocurrencies, #deviantart, #disney, #ethereum, #funding, #jack-dorsey, #jeffrey-katzenberg, #mark-pincus, #operating-systems, #penny, #social-media, #software, #spokesperson, #twitter, #venture-capital, #zynga

Gaming infrastructure startup Pragma raises $12M from Greylock, Mark Pincus and others

Pragma is building what it calls a “backend as a service,” providing ready-made infrastructure to developers of online, live service games. And it’s announcing today that it has raised $12 million in Series A funding.

The round was led by David Thacker at Greylock, with participation from Zynga founder Mark Pincus, Oculus founder Nate Mitchell and Cloudera founder Amr Awadallah, along with previous investors Upfront Ventures and Advancit Capital. Amy Chang, who sold her business intelligence startup Accompany to Cisco, is joining Pragma’s board of directors.

Co-founder and CEO Eden Chen told me that where Unity and Unreal have built popular frontend game engines, he and his co-founder Chris Cobb (former engineering lead at Riot Games) are hoping Pragma will fill the void for a “de facto backend game engine.”

And while “many companies tried to do this” over the past decade, Chen suggested that this is the right time to launch the platform, thanks to the continued rise of live service games (like League of Legends) that have to be treated as “living, breathing products,” as well as improved tooling around infrastructure platforms like Amazon Web Services.

Pragma screenshot

Image Credits: Pragma

Pragma is launching a starter kit today designed to allow developers to quickly set up and test game loops. Meanwhile, the broader platform is currently in private beta testing with studios including One More Game (started by started by Pat Wyatt, one of Blizzard’s first employees) and Mitchell’s Mountain Top Studios.

Chen said the platform’s features fall into three broad categories — player accounts/social, game loops (including lobbies and matchmaking) and player/game data. Pragma isn’t building all of this from scratch; in some cases, it’s “acting as the integrator” for other platforms like Discord. Chen also noted that while the team plans to build a fully managed solution in the future, the current version is on-premise: “We’re building an instance of Pragma on the studio’s own infrastructure, [so they can] so they can take our code base and customize it to their own preferences.”

Pragma is initially targeting game studios with about 10 to 50 team members. Eventually, Chen hopes the platform could serve larger studios while also supporting “the democratization of these tools, so that a one- to five-person team can really leverage [them] to launch a networked, online game.”

He added, “The vision for us long term is that we really want to be innovating on the social side, creating social features that improve the game and build stronger connections.”

#funding, #fundings-exits, #gaming, #greylock-partners, #mark-pincus, #pragma, #startups, #tc

Citadel ID raises $3.5M for API-delivered income and employment verification

This morning Citadel ID announced a combined $3.5 million raise for its income and employment verification service. The startup provides an API to customer companies, allowing them to rapidly verify details of consumer employment.

The capital came from a blend of venture firms and angels. On the firm side, Abstract and Soma VC were in there, along with ChapterOne. Brianne Kimmel put capital in as well, according to the startup. And denizens with work histories at companies like Zynga (Mark Pincus), Stripe (Lachy Groom), Carta (Henry Ward), and others also put cash into the fundraise.

Citadel was founded back in June of 2020, before raising capital, snagging its first customer, and shipping its product all inside of the same year.

The idea for Citadel ID came when co-founder Kirill Klokov worked at Carta, the cap-table-as-a-service startup that recently built an exchange for the trading of private stock. Klokov discovered while working on the tech side of the company how hard it was to verify certain data, like employment and income and identity.

As Carta deals with money, stock, and the collection and distribution of both, you can imagine why having having a quick way to verify who worked where, and since when, mattered to the company. But Klokov came to realize that there wasn’t a good solution in the market for what Carta needed, sans building integrations to a host of payroll managers by hand and dealing with lots of data with varying taxonomies. That or using an in-the-market product, like Equifax’s The Work Number, which the founder described as expensive and offering relatively low coverage.

To fill the market void Klokov helped found Citadel ID, quickly building integrations into payrolls managers where there were hooks for code, and working around older login systems when needed. Citadel ID’s service allows regular folks to provide access to their employment data to others, allowing for the verification of their income (a rental group, perhaps), or employment (Carta, perhaps) quickly.

Per the startup the market demand for such verifications is in the hundreds of millions every year in the United States. So, Citadel should have plenty of market space to grow into. Citadel ID has around 20 customers today, it told TechCrunch, and charges on a per verification basis.

Finally, while Citadel also offers data via its website and not merely through its API, the startup still fits inside the growing number of startups we’ve seen in recent quarters foregoing traditional SaaS, and instead offering their products via a developer hook (sometimes referred to as a ‘headless’ approach). API-delivered startups are not new, after all Twilio went public years ago. But their model of product delivery feels like its gaining momentum over managed software offerings.

Let’s see how quickly Citadel ID can scale before it raises its Series A.

#brianne-kimmel, #business, #carta, #citadel-id, #co-founder, #companies, #computing, #entrepreneurship, #equifax, #fundings-exits, #henry-ward, #human-resources, #lending, #mark-pincus, #private-equity, #rental, #startup-company, #startups, #stripe, #tc, #twilio, #united-states, #verification, #zynga

With a reported deal in the wings for Joby Aviation, electric aircraft soars to $10B business

One year after nabbing $590 million from investors led by Toyota, and a few months after picking up Uber’s flying taxi businessJoby Aviation is reportedly in talks to go public in a SPAC deal that would value the electric plane manufacturer at nearly $5.7 billion.

News of a potential deal comes on the heels of another big SPAC transaction in electric planes, for Archer Aviation. If the Financial Times‘ reporting is accurate, then that would mean that the two will soon be publicly traded at a total value approaching $10 billion.

It’s a heady time for startups making vehicles powered by anything other than hydrocarbons, and the SPAC wave has hit it hard.

Electric car companies Arrival, Canoo, ChargePoint, Fisker, Lordstown Motors, Proterra and The Lion Electric Company are some of the companies that have merged with SPACs — or announced plans to — in the past year.

Now it appears that any company that has anything to do with the electrification of any mode of transportation is going to get waved onto the runway for a public listing through a special purpose acquisition company vehicle — a wildly popular route at the moment for companies that might find traditional IPO listings more challenging to carry out but would rather not stay in startup mode when it comes to fundraising.

The investment group reportedly taking Joby to the moon! out to public markets is led by the billionaire tech entrepreneurs and investors Reid Hoffman, the co-founder of LinkedIn, and Mark Pincus, who launched the casual gaming company, Zynga.

Together the two men had formed Reinvent Technology Partners, a special purpose acquisition company, earlier in 2020. The shell company went public and raised $690 million to make a deal.

Any transaction for Joby would be a win for the company’s backers including Toyota, Baillie Gifford, Intel Capital, JetBlue Technology Ventures (the investment arm of the US-based airline), and Uber, which invested $125 million into Joby.

Joby has a prototype that has already taken 600 flights, but has yet to be certified by the Federal Aviation Administration. And the success of any transaction between the company and Hoffman and Pincus’ SPAC group is far from a sure thing, as the FT noted.

The deal would require an additional capital infusion into the SPAC that the two men established, and without that extra cash, all bets are off. Indeed, that is probably one reason why anyone is reading about this now.

Alternatively powered transportation vehicles of all stripes and covering all modes of travel are the rage right now among the public investment crowd. Part of that is due to rising pressure among institutional investors to find companies with an environmental, sustainability, and good governance thesis that they can invest in, and part of that is due to tailwinds coming from government regulations pushing for the decarbonization of fleets in a bid to curb global warming.

The environmental impact is one chief reason that United chief executive Scott Kirby cited when speaking about his company’s $1 billion purchase order from the electric plane company that actually announced it would be pursuing a public offering through a SPAC earlier this week.

“By working with Archer, United is showing the aviation industry that now is the time to embrace cleaner, more efficient modes of transportation,” Kirby said. “With the right technology, we can curb the impact aircraft have on the planet, but we have to identify the next generation of companies who will make this a reality early and find ways to help them get off the ground.”

It’s also an investment in a possible new business line that could eventually shuttle United passengers to and from an airport, as TechCrunch reported earlier. United projected that a trip in one of Archer’s eVTOL aircraft could reduce CO2 emissions by up to 50% per passenger traveling between Hollywood and Los Angeles International Airport.

The agreement to go public and the order from United Airlines comes less than a year after Archer Aviation came out of stealth. Archer was co-founded in 2018 by Adam Goldstein and Brett Adcock, who sold their software-as-a-service company Vettery to The Adecco Group for more than $100 million. The company’s primary backer was Marc Lore, who sold his company Jet.com to Walmart in 2016 for $3.3 billion. Lore was Walmart’s e-commerce chief until January.

For any SPAC investors or venture capitalists worried that they’re now left out of the EV plane investment bonanza, take heart! There’s still the German tech developer, Lilium. And if an investor is interested in supersonic travel, there’s always Boom.

#adam-goldstein, #airline, #baillie-gifford, #canoo, #chargepoint, #co-founder, #corporate-finance, #e-commerce, #economy, #evtol, #federal-aviation-administration, #finance, #fisker, #intel-capital, #investment, #jet-com, #jetblue-technology-ventures, #joby, #joby-aviation, #lilium, #linkedin, #lordstown-motors, #marc-lore, #mark-pincus, #private-equity, #proterra, #reid-hoffman, #reinvent-technology-partners, #software-as-a-service, #spacs, #special-purpose-acquisition-company, #tc, #the-adecco-group, #the-financial-times, #toyota, #transportation, #uber, #united-airlines, #vettery, #walmart, #zynga

Goodbye Flash, goodbye FarmVille

While much of what made 2020 such an absolute nightmare will still be with us on January 1 (sorry!), we will really, truly be leaving Adobe Flash and FarmVille behind as we enter the new year.

The end of Flash has been a long time coming. The plugin, which was first released in 1996 and once supported a broad swath online content, has become increasingly irrelevant in a smartphone-centric world: iPhones never supported Flash, and it’s been just over 10 years since Apple’s then-CEO Steve Jobs published an open letter outlining the technology’s shortcomings.

Adobe has been planning for the end, announcing in 2017 that it would phase out Flash by the end of this year. Most web browsers have already stopped supporting Flash, and today is the official end date, with Adobe ending support itself — although there’s still one last “death of Flash” milestone on January 12, when the company will begin to block Flash content from playing.

In related news, Zynga announced recently that the end of Flash would also mean the end of FarmVille, since the game relies on the Flash plugin.

Like Flash, FarmVille feels like a remnant of a bygone internet era (a fact that makes me feel incredibly old, since I wrote plenty of words about both of them at the beginning of my career). Launched in 2009, FarmVille’s popularity paved the way for the ascendance of Zynga and of Facebook gaming, but both Zynga and gaming have largely moved on.

The company’s co-founder and former CEO Mark Pincus commemorated the occasion with a series of tweets outlining the game’s early development (spurred by the acquisition of startup MyMiniLife).

“FarmVille demonstrated that a game could be a living, always-on service that could deliver daily surprise and delight, similar to a favorite TV series,” Pincus wrote. “Games could also connect groups of people and bring them closer together.”

And just in case there are any FarmVille fans reading this story, don’t worry: you can still play FarmVille 2: Tropic Escape, FarmVille 2: Country Escape right now, and FarmVille 3 is still coming to mobile. Today is just the final day for the original game.

#adobe, #facebook, #flash, #gaming, #mark-pincus, #myminilife, #social, #zynga

Reid Hoffman, Zynga’s Mark Pincus aim to raise $600M for tech-focused SPAC

Reinvent Technology Partners, a new special purpose acquisition company formed by famed investor and serial entrepreneur Reid Hoffman, Zynga founder Mark Pincus and veteran hedge fund manager Michael Thompson, filed Monday for a $600 million initial public offering.

The SPAC was formed by Hoffman, Pincus and Thompson, formerly of BHR Capital, with the intention of merging with a technology company. Thompson will be director, CEO and CFO. Hoffman and Pincus are co-lead directors. The company plans to list on the NYSE under the symbol RTP.U. Once, and if, the Reinvent Technology Partners raises the $600 million, the capital will move into a blind trust until its management team decides which company it wants to acquire.

SPACs are blank-check companies that are formed for the purpose of merging or acquiring other companies. SPACs have become an increasingly popular means in 2020 for venture-backed companies to go public without having to take the traditional IPO path. In the past several months, a number of venture-backed companies have merged with SPAC companies in lieu of a traditional IPO process, including online used car marketplace startup Shift Technologies, lidar companies Luminar and Velodyne Lidar and a handful of electric vehicle startups such as Canoo, Fisker Inc., Lordstown Motor and Nikola Motor.

In January, Axios reported that Pincus and Thompson, with Hoffman as an adviser, were raising up to $700 million for a new investment fund that planned to focus on publicly traded tech companies in need of strategic restructuring.

Monday’s filing fills in some of the details. The brain trust that is Hoffman, Pincus and Thompson appear to view this SPAC as another means to be a new kind of venture capital partner for a tech company set to go public.

Here’s the entire letter from Hoffman and Pincus, which was included in the filing:

We believe there is a need for a new, additional type of venture capital that helps companies at scale pursue innovation and step function growth long past their IPOs.

Throughout our careers as entrepreneurs, investors, and directors, we have been students of why some tech companies sustain as market leaders. Often people view these companies from the outside in
as perfect, uninterrupted growth stories that were almost pre-ordained. However, we realize that behind these mythical growth stories are many hard fought cycles of invention and reinvention. Invention is when a company builds a new product and achieves growth in an adjacent market, such as Amazon developing AWS. Reinvention is when a company has to adapt its core products and services to continue growing in an existing market, as Netflix did moving from DVDs to streaming.

For many public tech companies — especially mid-cap sized — these cycles can prove challenging to navigate while maintaining investor alignment. We went through our own invention and reinvention cycles while public at Zynga and LinkedIn, and it wasn’t easy.

We are excited to be a new kind of venture capital partner at the table for one of the many tech companies set to go public over the next few years and to help it maintain a growth mindset, be bold, and go for it in the face of pressure to deliver quarterly results.

We hope our experience, ideas, and insights can make a difference as we partner with a founder and CEO as they build a market-leading company that delivers products and services that matter in people’s lives.

#finance, #mark-pincus, #reid-hoffman, #reinvent-technology-partners, #spac, #tc