As the NFT ecosystem continues to grow, most of the volume still moves through the centralized NFT marketplace, OpenSea. Thus, crypto venture capitalists are eager to find new channels. On Thursday, Katie Haun's new firm, Haun Ventures, made its first big move in Zora Labs' NFT startup. It led to a $50 million funding round for Zora Labs. Also, Coinbase Ventures, Kindred Ventures, and others joined the round, valuing the company at $600 million.
Founded by three Coinbase veterans in 2020, Zora started as a service that allowed musicians and other artists to sell digital tokens tied to physical artifacts like cassettes. Since then, it has pivoted itself towards building an open-source protocol that allows anyone to create an NFT marketplace.
Currently, Zora's services are like Shopify or WordPress, which offers easy-to-use tools for building online stores and websites. The only difference is that Zora provides such services for NFTs and the emerging Web3 economy.
Meanwhile, those using Zora's protocol include Catalogue, an NFT music service. In addition, it has powered many high-profile NFT drops, including a Doge NFT selling for $4 million and one for the Warhol Foundation. Also, publishing startup Mirror and collective FWB have used Zora's protocol for selling NFTs to community members.
According to Zora co-founder Jacob Horne, the company's goal has always been the same. It wants to provide artists with new ways to sell their creations online. However, it wants to eliminate the centralized Web2 gatekeepers, imposing great restrictions while taking a big revenue cut.
Horne stated, "The goal is the same—to help creators get as much value from their work." He added that as the NFT market evolves, demand for niche verticals will rise, where creators and fans can come together.
While this thesis has been popular among Web3 watchers, it is also challenged by the ongoing dominance of OpenSea. While several rival NFT marketplaces have emerged, OpenSea continues to own upwards of 90% of the market share.
However, Horne claims that Zora is different. Unlike OpenSea, Zora doesn't use a centralized database for managing NFTs, but it uses an open and on-chain protocol. In fact, more than 50% of Zora's transactions come from third-party websites.
As for revenue, Zora sells development tools for companies to customize its free protocol for their particular use. Furthermore, Zora also plans to build out a DAO that can raise money through the sales of governance tokens.
After the Zora investment, Haun Ventures' Sam Rosenblum stated that the firm views Zora as the next generation of the web.
"Haun Ventures is dedicated to backing teams building a better internet," Rosenblum said. "NFTs are a core building block that are central to the future of the web.”