NFT brand loyalty platform Hang banks $ 16M from Paradigm – TechCrunch
Crypto-startups – fresh on an astonishing bull run – are preparing for the next phase of life where just the mention of “NFT”, “DAO” or “DeFi” may not tempt investors as much as before. The breed of crypto startups that are growing now wants to double down on scoring more traditional customers instead of building a self-referencing cryptocurrency base. These startups are pressured to distill the lessons of the bull run and find the truth in the former froth.
Web3 Startup Hang is one such startup that wants to build a branded customer base and help them leverage NFTs to replace their existing membership and loyalty programs. The startup hopes that by leveraging the blockchain, users will be able to buy into and sell elite membership status, find the market value of the benefits offered by loyalty programs and build a closer relationship with the brands they visit.
“By leveraging NFTs and the blockchain, there are far better ways to solve real-world brand problems,” CEO Matt Smolin told TechCrunch. “We really see this as a new way of herding in a new relationship between consumers and brands.“
Smolin’s start-up has just invested 16 million dollars in new series A financing from the crypto-adventure company Paradigm. Other investors include Tiger Global, Good Friends, Kevin Durant’s Thirty Five Ventures, MrBeast’s Night Ventures and Shrug Capital, among others. Some early customers of the brand include Budweiser, Bleacher Report, Pinkberry and the music festival group Superfly.
Loyalty programs existed long before blockchains, but Smolin believes that it is better for all parties involved to add a floating market for the right to enter or exit a brand’s loyalty benefits. Instead of giving each brand its own cryptocurrency-supported points, Hang’s efforts aim to provide users with NFTs that they can upgrade by being a fan. By engaging with the brand, buying things or attending events, users can upgrade the status of the NFT membership, which they can eventually sell to someone else with the benefits they receive related to it.
Smolin refers to how far users go at the end of the year to reach the next level of airline status as a way to indicate how they price the value of the service; he wonders if more services can build this relationship and create better membership programs for users. The reality is that most brand loyalty programs are not so good and often offer only one way to more direct spam a user through communication. Smolin believes that rising customer acquisition costs will force brands to reconsider their basic approach and may force them to take a risk on NFTs.
