(Bloomberg) -- The software company behind Story Protocol, an intellectual property-focused blockchain, raised $80 million in a round led by venture capital firm a16z crypto.
Palo Alto-based PIP Labs, Story’s core developer, secured the capital at a valuation of $2.25 billion, according to people familiar with the matter who asked not to be identified discussing confidential information. Other investors in the round include Polychain Capital, Stability AI Vice President Scott Trowbridge, K11 Founder Adrian Cheng and digital art collector Cozomo de’ Medici, PIP Labs said in a statement.
A spokesperson for the company declined to comment on its valuation.
One example of Story in action is a tie-up with art collaboration platform Magma that would allow fans to render scenes from a favorite video game without worrying about copyright infringements. Story’s technology ensures the original artists are compensated and that any derivative works fall within preset guidelines.
The funding comes as venture capital investment into crypto startups gradually picks up after a fallow year in 2023. About $13.3 billion had been invested in the sector’s early-stage outfits this year as of July 2024, already surpassing the $10.8 billion they raised last year, according to The Block Research data.
While infrastructure-focused investments have seen the biggest rebound, web3 startups have drawn in $1.9 billion so far this year — up from a total $1.4 billion in 2023. Story, which uses blockchain software to tokenize IP, arguably straddles both categories.
The term “web3” loosely refers to a new incarnation of the internet underpinned by blockchains — one in theory enriched by features such as nonfungible tokens and a system of interconnected digital worlds known as the metaverse. Enthusiasm for the concept has faded since its heyday in 2022, with no recovery in sight even after a surge in crypto markets earlier this year.
Story’s Layer-1 blockchain lets creators of everything from memes to AI models to establish ownership of their IP. They can use the technology to prevent theft, register designs, earn royalties and tailor usage parameters, as well as nurture a network of potential users, according to the statement.
“We are building the programmable intellectual property layer for the age of generative AI,” said S. Y. Lee, co-founder and CEO of PIP Labs, in an interview with Bloomberg News. “Every single IP is a massive asset class. It can be your voice, characters, music pieces, it can be anything that’s represented as creative, outdoor intellectual output that can be an IP.”
The Story blockchain also allows developers to create apps linked to IP stored on the platform, he added.
The proceeds of the $80 million Series B round will be spent on funding such developers, as well as for research and to support IP creators, according to Lee. PIP Labs has now raised $140 million in total, the company said.
©2024 Bloomberg L.P.