Star-studded digital avatar startup Genies launches NFT fashion marketplace TechCrunch

Digital avatar startup Genies, known for high-profile partnerships with celebrities like Justin Bieber, Migos and Cardi B, has just released its long-awaited NFT storefront, “The Warehouse.” Genies last earned a $1 billion valuation from high-powered tech investors including Silver Lake and Mary Meekers Bond Capital during its most recent raise, a $150 million Series C round announced in April.

The Los Angeles-based company partnered with NBA Top Shot NFT creator Dapper Labs to develop the storefront on Dapper’s Flow blockchain and debuted it to an invite-only group of beta users last December, TechCrunch reported at the time. Now The Warehouse is available to the general public, meaning users can download the Genies Studio app to create their own avatars and buy digital fashion items to dress them up, Genies CEO and founder Akash Nigam told TechCrunch in an interview.

Genies is working with a hand-picked group of creators to design the first set of collections available on the platform, Nigam said. One of the first collections will come from fashion photographer and influencer Tati Bruening, known on Instagram as @illuminati, where she went viral for her petition to “Make Instagram Great Again.”

Genie’s CEO and Founder Akash Nigam Image credit: Geniuses

Users can also use in-app tools to change the clothes they buy, allowing them to customize items they buy from these collections, he added.

“Creators will be selling their own avatar fashions, and those they’ve customized over the last couple of months. And when they sell out – let’s say someone sells like 100 items, and let’s say if a fan or follower or someone in the community decides to buy it for their own avatar, they also now have the rights to be able to edit it or do it themselves within the studio platform, so they can use the tools and create a derivative collection, and then sell the derivative fashion line in The Warehouse,” explained Nigam.

Because each item is an NFT, the original creator gets a cut of the revenue every time that item is resold and owns the intellectual property behind the design, he added. Genies takes a 5% fee on each sale, allowing creators to keep most of the revenue they earn from each transaction, Nigam said, contrasting that with the 50%+ fee Meta takes for NFTs within the Horizon Worlds metaverse. (Meta is also moving ahead with its NFT plans, announcing earlier this week that it would allow users to post their NFTs on both Facebook and Instagram after launching its own digital clothing offering in June).

Meta isn’t the only tech company looking to figure out their own identity by helping people create their own using digital avatars. Reddit launched its own NFT avatar marketplace in July, and Estonian startup Ready Player Me raised $56 million led by a16z for a similar vision earlier this month. Genies certainly holds its own in the space through its celebrity partnerships and its own team – the startup counts ex-Disney CEO Bob Iger as an investor and board member.

On Genie, only approved sellers on the platform will be able to launch collections to start, although the company says it eventually wants to empower all its users to create unique 1-of-1 fashion items. Genies has made forays into fashion before — the startup partnered with Gucci back in 2020 to give the retailer’s customers access to try on new virtual designs and buy curated digital goods.

An image of the Genies platform showing a fashion collection designed by creator Ian Charms Image credit: Geniuses

NFT sales volumes are falling and crypto prices are still down, but Nigam expressed confidence in the long-term demand for digital avatars, comparing them to mobile apps in their importance to the internet.

“The reason I think avatar ecosystems are going to be the mobile apps of the web3 is because you see two massive consumer trends perpetuating. There’s one trend, which is the virtual trend, which is … I mean, it’s obvious. Everyone wants to exist in a 3D spatial world,” Nigam said.

Second, he added, avatars allow people to have ownership and individuality in the digital world.

“I think a lot of creators understand that they’re contributing so much back to all these different platforms, but they’re not reaping nearly enough of the benefits,” Nigam said.

Still, he expressed hesitance to characterize and market the startup as an NFT company, even though NFTs are at the heart of the business model. He described Genies’ target demographic as the Gen Z cool kids of the internet rather than crypto-native users who view NFTs as financial assets, noting that 85% of users on The Warehouse’s waiting list are women.

“The mentality around this is so different, like people are just obsessed with digital fashion itself and creating your dream closet,” Nigam said.

Eventually, Nigam sees the company expanding into a full-fledged social network, which he said Gen Z is “hungry for.” He sees Facebook and Snapchat primarily as messaging apps and said Instagram has an “identity crisis”. In the meantime, he hopes Genies will develop as a place where people can easily meet like-minded friends on the internet – a vision the company has moved one step closer to with the launch of the app and storefront.

“I don’t think people even consider that if I buy this as an asset, I get to unlock X, Y and Z, and it increases in value, and I can sell it one day,” Nigam said. “They’re just like, I just want to make shit, and then I’ll kind of switch it up and collaborate with my friends and make that too.”