PIP Labs unveiled one of the biggest crypto raises this summer. Co-founder Seung Yoon Lee hopes that Story Blockchain can help creators get more out of AI companies. This is the third fundraiser a16z has led for the lead developer behind the story.
Seung Yoon Lee started his first startup, a serialized fiction app, when he came to Silicon Valley 10 years ago to have venture capital titan Andreessen Horowitz invest in it several times, he said. News.
Lee, who goes by SY, eventually sold the startup, Radish, for $440 million in 2021 and quickly co-founded a new project: a blockchain to store intellectual property and track usage.
Now, Lee has finally caught the attention of Andreessen Horowitz. The VC's blockchain-focused arm, a16z Crypto, led three rounds of investment in Lee's company, PIP Labs, including the $80 million round Lee announced Wednesday.
“They're tripling, which is rarer than I know,” says the PIP Labs CEO and co-founder.
'Economic Covenant'
PIP Labs is the lead developer of the Story blockchain, a rebrand of the previous name Story Protocol.
As with many crypto projects, there will be an associated nonprofit organization called the Story Foundation, Lee said.
Other investors in the Series B raise include Polychain Capital, a well-known crypto VC; Scott Trowbridge, Senior Vice President and Board Member at Stability AI; and Cosomo de' Medici, NFT collector.
Lee declined to disclose his company's most recent valuation or how much a16z has committed to fundraising. He added that the $80 million in PIP Labs is for equity, not future tokens.
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“The economic covenant underlying the Internet — content creators providing the supply and content distributors providing the demand — is being augmented by the deployment of AI,” Chris Dixon, founder and managing partner of a16z Crypto, said in a statement. “PIP Labs is building the necessary infrastructure for a new covenant.”
The $80 million payout for PIP Labs is the second in less than a year and one of the biggest deals of the summer in crypto. Crunchbase's Web3 Tracker.
The fundraising comes amid a recent decline in the number of crypto venture deals. According to the most recent, the deal count was down about 13% from the beginning in the second quarter Report From Pitchbook.
$140 million
The story is one no of projects To use blockchains to store, document and transfer intellectual property rights.
The European Union has also explored how distributed ledgers can help businesses protect their IP.
PIP Labs announced in September that it had raised more than $54 million In a round led by a16z in partnership with angel investor Balaji Srinivasan, Paris Hilton's venture firm 11:11 Media and former Microsoft executive Charlie Songhurst.
Lee said the September announcement included $30 million in seed funding and a $24 million Series A raise.
After the announcement, $6 million in additional funding was received, bringing PIP Labs' total to $140 million over three rounds, he said.
Since September, there has been co-founder Jason Zhao Said His startup will launch its blockchain later this year.
The upcoming chain is compatible with code written for Ethereum, one of the most popular blockchains for crypto developers.
Data-swallowing cows
Lee envisions Story as a potential solution to the rise of productive artificial intelligence.
For tech giants like OpenAI, the success of their language models depends on terabytes and terabytes of data.
However, there is only so much quality text, photos and videos on the internet.
“They're already running out of great data,” Lee said. “They're turning out really great IP.”
The most recent study Tech giants from research group Epoch AI may supply publicly available text for AI language models somewhere between 2026 and 2032.
A pitch deck for PIP Labs sent by Lee News The state of play has been compared to a herd of cows that gradually deplete the grasslands until the lands become barren.
“Who has the incentive to create content if the data that feeds the cows doesn't have a sustainable business model to support its production?” Read the deck.
This is where the story comes in, says Lee. Blockchain encourages creators to register their IP in a decentralized database so they can track what royalties they receive and who remixes their data.
“It's going to take time,” he said, “but I think it's a very long-term vision that we want to build on.”
Ben Weiss is the Dubai correspondent News. Got a tip? Email him [email protected].