Recent fashion weeks both in real life and the metaverse are proof that the luxury and fashion industries are some of the first movers in the space. Luxury fashion brands such as Burberry and Gucci, have developed their Web3 strategies, with projects that include NFT drops and metaverse experiences to reach their tech savvy, young, and affluent customers.
Apart from being a channel to reach new demographics, NFTs and metaverse-related goods are a major source of revenue for businesses like Nike, Dolce & Gabbana, Tiffany, Gucci, and Adidas, which are reaping millions from NFTs. Blending virtual experiences with its iconic branding rights, Nike has generated a whopping $185 million in revenue from NFT sales.
However, Outlier Ventures (OV) and luxury fashion e-commerce platform FARFETCH are on a mission to take the fashion and luxury industry beyond single NFTs drops and campaign, prompting them to launch the Dream Assembly Base Camp accelerator program to support Web3 luxury commerce startups in building industry-defining solutions.
Following the announcement of Dream Assembly Base Camp’s first cohort, we speak to program manager Blake Lezenski to find out how digital fashion startups can shape the future of Web3 commerce.
Please tell us about yourself and the story behind Outlier Ventures.
I was originally a corporate VC investor in the energy space and built a pipeline of cleantech startups across 13 counties to establish partnerships with enterprise energy firms across Eastern Europe, the Middle East and Latin America. In 2017, I started angel investing, switched industries and launched Beyond Capital, a consultancy firm advising founders, investors and companies on how to leverage blockchain technology to achieve their strategic goals. I eventually came across OV by investing in one of the portfolio companies and stayed for good because of the amazing calibre of people I get to work with.
Outlier Ventures has been investing in Web3 and metaverse projects for almost nine years, driving the future of Web3 and the Open Metaverse to become the biggest Web3 accelerator globally and the third biggest crypto investor by volume of deals. We are an evergreen investor, meaning that we invest in bear and bull markets and stick with our founders through thick and thin. While the investment into Web2 tech might be slowing down, the adoption of Web3 is not.
What piqued your interest in the Web3 space and where did you first hear about it?
My passion for the metaverse came in two waves. Professionally, I entered the crypto world in 2017 by starting my advisory practice, Beyond Capital. Having worked with investors, startups, syndicates, fintech companies and banks, I was excited by the early adoption and specific knowledge that was still consolidating in the space. With time, however, I was disappointed by the slow pace of institutional adoption of crypto and very little presence of creatives in an industry dominated by tech experts. In 2020, I left a strict lockdown in Colombia on a humanitarian flight and returned to the industry when the NFT craze was picking up pace.
I was attracted back into the Web3 space by three factors: Firstly, thanks to NFTs, the Web3 space, once dominated by software engineers, was now filled with artists, musicians and designers. My fascination with digital scarcity and Web3 luxury started guiding my interest and investment focus.
The second reason was the calibre of people in the space, notably founders. Extremely smart, competent and ambitious, but consistently demonstrating kindness and the belief that the only hierarchy is the hierarchy of competence.
Why has Outlier Ventures decided to partner with FARFETCH for the Dream Assembly Base Camp and focus on fashion in Web3?
The partnership with FARFETCH is based on the shared perspective of broader adoption. FARFETCH enables us to empower the founders with their vast fashion network, market-leading brand, world-class luxury fashion mentors and their eagle-eye view of the entire fashion supply chain. The combined knowledge and experience in fashion and Web3 makes FARFETCH and OV a match made in metaverse heaven that provides a unique mix of support that founders need to succeed in the space.
How were the eight companies part of Dream Assembly Base Camp’s cohort selected? What were the criteria?
The eight companies selected represent the most promising Web3 start-ups in the luxury fashion and lifestyle sectors. When selecting our ideal participants from over 200 applications around the world, we were looking for a cohort that represents a diversity of thought and background, a combination of creativity and coachability.
The Dream Assembly Basecamp cohort are all storytellers that can effectively communicate their vision but also know how to drive execution. They demonstrate long-term resilience and adaptability to the fast-changing market. They understand the market dynamics and are realistic about the competitive landscape and timing. In Web3 luxury fashion, they represent domain expertise, knowing things that others don’t to begin developing a network in the space that we can help grow.
Finally, they prioritise learning by doing and are excited to fill gaps in their knowledge. Hard criteria include the alignment with the program thesis, the stage of product and how much validation it has had from the market, as well as whether the team’s current capacity measured up to the ambition of their plans.
What are some of the industry-defining solutions digital fashion companies can provide to fashion in Web3?
Altr digitizes archival fashion and cultural heritage designs; Curie automates the production of 3D digital twins at scale; iiNDYVERSE engages creator audiences with gamified Web3 experiences; METAV.RS provides Metaverse and NFT commerce whitelabel solutions; Mintouge Enables brands to on-ramp their product catalogues into web3 with a plug-in; Reblium creates a premium avatar experience for digital creators & identity expression; SKNUPS can bring designer skins into cross-platform gaming; and WEAR can empower luxury brands with tokenized loyalty solutions.
What other areas in the Web3 space is Outlier Ventures planning to invest in this year?
Through our core business model of Base Camp accelerator programs, beyond Web3 luxury fashion, we plan to support teams in Decentralized Finance as well as Filecoin, Polygon and HBAR ecosystems investing across layers from infrastructure to consumer-facing solutions. We currently have applications open for four Base Camps, with the first Zero Knowledge (ZK) accelerator building on OV’s thematic Base Camp offering. With the world and business moving increasingly on-chain, OV has chosen to focus on ZK as we recognise its capacity to radically improve a variety of aspects of Web3 enterprises, including in areas such as scalability and privacy.
What’s the most challenging aspect of your role and how do you overcome those challenges?
In a nascent industry like Web3, we navigate a sea of regulatory, business model and technical risks and the startups that we mentor are often dealing with these risks for the first time. Being able to pay attention and spot potential risks is a key challenge that changes with the business needs of each of the startups that we support. In these instances, it’s key that we fully understand the specific risk of each individual startup on the cohort so that we can navigate the right sequence with curated mentorship, networking and support to mitigate potential issues.
Where do you see fashion in Web3 going in the near future?
Given that Web3 is a cultural and technological movement, the fashion industry is driving its future adoption. The metaverse fashion market is expected to increase to $6.61 billion from 2021 to 2026. As fashion finds its Web3 footing, I think we’ll see endless use cases across the utility of digital fashion, immersive experiences, community curation, creator economy and tokenized loyalty in the near future.
I am particularly excited about the increasing interoperability of assets across the open metaverse. Many of our cohort are exploring how to connect fashion wearables, NFT collectables, personalised avatars and content across multiple games and experiences, enabling users to express themselves across rich, interconnected worlds with increased engagement, ownership and control.
Any other Web3/digital fashion-related industry issue you would like to talk about?
There has been a lot of attention around the decline of NFTs this year. While this is mostly centered around the highly volatile PFP market, the disruption that the NFT format has with fashion and luxury is here to stay. Despite a market downturn following the Luna debacle, the trend of fashion and luxury brands entering the space is not slowing down.
For those players it’s an investment in engaging a new generation of consumers, but most importantly it’s about establishing a strong brand foothold in the Open Metaverse to ensure its longevity through technological breakthroughs.
With Nike buying RTFKT and Gucci entering the space from many angles from a town in Roblox, wearables collection for PFPs, phygital drop or an e-gaming team, the key players in global fashion seem to understand intuitively that digital fashion is not only solving one of the most pressing problems in fashion – pollution through fast consumption – but is emerging as the new frontier of expressing your identity.
While this is what fashion has always been about, in the digital realm it opens up a whole range of possibilities from fantasy avatars to clothes and textures that could never be created or worn IRL – now are made possible in the metaverse.
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