Last Updated on October 12, 2022
- A16z Crypto has invested in Justin Kan’s new web3 startup Rye.
- The web3 venture capital firm led the $14 million fundraising, which also attracted participation from Goat Capital and Solana Ventures among others.
- Kan and his co-founders will use the funds to accelerate the development of the Rye platform, dubbed the Shopify of web3.
Justin Khan has raised $14 million for his new web3 startup Rye. The Twitch co-founder has teamed up with four co-founders to develop what they are calling Shopify for web3.
The fundraising was led by Andreessen Horowitz’s (a16z) web3 venture arm, A16z Crypto. The round also attracted participation from Kan’s venture firm Goat Capital, Solana Ventures, Electric Ant, Electric Feel Ventures, L Catterton, former Tilt founder James Beshara and NBA veterans Andre Iguodala and JaVale McGee.
Rye will use a native token $RYE to help lower e-commerce transactions on its platform. The organisation will be headed by CEO Arjun Bhargava, a former Reddit engineer, while Khan will serve as head of sales.
According to Bhargava, Rye will provide a one-click interface that will allow merchants to display some or all of their items on the new web3 marketplace. The platform will also provide a directory for developers to embed the items within their own sites and apps, allowing seamless access to the products across the internet.
The company believes its native token will help to lower the cost of transactions significantly relative to web2 e-commerce giants Shopify and Amazon.
The co-founders told Forbes that by running a token protocol, they believe they will be able to compensate for the lower fees in the long run. The company is betting on the expectation that the $RYE token will continue to gain popularity with time thus gaining value, which its venture capital backers could benefit from by redeeming their rewards, offered via NFT drops, cash-backs and coupons.
“Merchants and brands that are selling products, especially DTC (direct-to-consumer) brands, they’re essentially getting ripped off,” Bhargava said. “We’re not getting a percentage of fees, we’re not going to raise fees over time, because we don’t have the ability to do that.”
Other co-founders joining Bhargava and Kan include Tikhon Bernstam, Jamie Quint, Saurabh Sharma and Robin Chan. Bernstam, who co-founded Scribd will spearhead the tokenomics department, while Quint who worked at Reddit will head the Product Unit.
On the other hand, Sharma also a former engineer at Reddit will be the chief technology officer, while Chan, who works with Kan at his venture firm Goat Capital will serve as head of business development at Rye.
Sriram Krishnan, general partner at A16z crypto said Rye will bring democratisation to e-commerce, by giving its users an opportunity to influence the decisions made by the network.
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