Crypto artwork marketplace SuperRare announced today that it has raised $9 million in a star-studded Series A funding round that includes prominent investors and celebrities alike.
Velvet Sea Ventures and crypto fund 1confirmation led the funding round, although it’s names like billionaire investor Mark Cuban, tech giant Samsung’s SamsungNext investment fund, and Ashton Kutcher and Guy Oseary’s Sound Ventures that really turn heads. Salesforce founder and CEO Marc Benioff, AngelList co-founder Naval Ravikant, and Social Capital CEO Chamath Palihapitiya are other major backers that participated in the round.
SuperRare’s Series A funding comes at a time of explosive growth and demand for non-fungible tokens (), which are tokenized digital artwork and collectibles that are verifiably scarce and can be authenticated by blockchain technology. An NFT can be a still image, animated gift, video, or other digital item, and they are selling like hot cakes: the top three NFT marketplaces recorded $342 million in trading volume in February alone, which is more than all of 2020 combined.
The ETH-based SuperRare has seen similarly surging growth, according to numbers provided by the company. SuperRare claims some $25 million per month in trading volume so far this year, with more than $30 million paid to artists to date. Creators who sell their artwork on SuperRare continue to get a 10% cut of secondary sales whenever it changes hands.
Decrypt spoke with SuperRare CEO John Crain on Monday to discuss the news. According to Crain, the firm plans to use the funding to expand its team, develop a dedicated mobile app, and explore digital display integrations for showcasing its NFT artwork. SuperRare is also looking to expand the number of exhibitions it holds, along with putting on events. “We want to fund the growth of this new and evolving digital art scene,” he said.
Crain said that SuperRare has seen a huge increase in site visits, membership signups, and support requests, and has had to ramp up its team to meet the demand—and “grow as quick as the market is,” he said. Beyond their money, Crain said he believes the new investors’ expertise with “distribution and scale” will be useful for helping SuperRare reach significantly more people, and bring the concept of digital art collecting further into the mainstream.
Mark Cuban has been popping up all over the NFT space lately. The Dallas Mavericks owner and Shark Tank star has been outspoken about the potential for digital collectibles, and already in March has invested in NFT-based social network startup Nifty’s, NFT artwork showcase platform Lazy.com, and Esprezzo, a a “no-code automation and data platform” designed for NFT and DeFi apps.
“We never really had a standard to identify unique digital objects,” said Crain when asked about Cuban’s interest in NFTs. “I think it’s as game-changing as the invention of the blockchain itself, and there’s a bunch of really good, strong use cases there. I think he’s an early adopter and sees the potential in lots of different verticals.”
Crain acknowledged the discussion around the ecological impact of NFTs, especially surrounding ETH, which is an energy-intensive proof-of-work blockchain. He suggested that some of the concerns about the environmental footprint of NFTs were “misplaced” in his view, but said that SuperRare is looking into options of using an alternative blockchain or a layer-2 scaling solution on top of ETH to potentially offset the environmental hit of NFTs. Ultimately, however, he believes that the eventual shift to ETH 2.0 and its proof-of-stake consensus system is “the strongest contender for a decentralized smart contract platform.”
NFTs have become very popular and very valuable seemingly in the blink of an eye, but Crain does not expect a big bubble pop for crypto artwork. He believes that the practice of verifying digital artwork using NFTs will prevail even when the current “hype cycle” winds down, and that there’s still a long runway ahead for NFTs and digital art collecting.
“What’s going to come out of it is evidence that digital art is a great use case for NFTs. Virtual land is a great use case for NFTs. This thing’s growing really quickly,” Crain told Decrypt. “Do I think the digital art volumes are going to pop dramatically? I’d say probably no. There’s a really strong use case for NFTs to basically authenticate digital art, and I think that’s going to be a pretty big market. Even though the growth seems really big, it’s still pretty early and small.”