An Austin-based NFT startup is off to the races with a round of seed funding that includes several prominent angel investors.
Tokenproof said Aug. 31 it has raised a $5 million seed round led by Penny Jar Capital, a Bay Area firm backed by NBA star Stephen Curry. Other firms in on the round included Corazon Capital, 6th Man Ventures and Canonical Crypto.
Curry isn't the only big name on the cap table. The startup secured investment from Mark Cuban, as well as The Sandbox co-founder Sebastien Borget, TIME President Keith Grossman and Proof of Attendance Protocol founder Patricio Worthalter.
Tokenproof, founded earlier this year by CEO Fonz Olvera, has developed a secure way for NFT owners to prove ownership and credentials without opening their digital wallet, which can create privacy and theft risks. After a one-time wallet verification, tokenproof users get ownership credentials that aren't connected to their wallets, making it easier to use NFTs to access events or other assets that require tokens.
"Eliminating the unnecessary risk of connecting or carrying a digital wallet is crucial for mainstream use of NFTs," Olvera stated. "We are dedicated to delivering the security and privacy users deserve while making it seamless for companies to unlock the possibilities of NFTs and connect with people in compelling and creative ways."
The startup has already used its platform at several events, including hosting its own pilot event during SXSW using proof of attendance protocol, or POAPs, as tickets and its platform to validate tickets.
The company operates remotely and has 11 employees, with three of them in Austin.
Olvera's bio notes that he is originally from Mexico City and now lives in Austin. He built inventory control software in the oil and gas industry before bootstrapping a startup that sold to a public oilfield services company, although his bio doesn't disclose the names of the companies. He stayed on with the oilfield company three years, "even though he hated the uptight corporate culture."
Early in the pandemic, Olvera worked with former VMware CEO Paul Maritz on a vaccination passport startup that later shut down as the field became politicized, according to his bio. But he pivoted the technology to NFT verification.
Tokenproof's launch and funding come at a critical time for Web3 technology. While crypto markets have been fluctuating and several firms have hit major financial problems, many investors are bullish on the future of NFTs and other blockchain-based tech.
In May, the Wall Street Journal reported that the sale of NFTs declined 92% from its peak in September — a decline of about 225,000 sales per week to about 19,000. Meanwhile, the number of active wallets fell from 119,000 per week in November to about 19,000 in May.
Meanwhile, Tokenproof noted that a July 2022 report from Technavio showed the NFT market is poised to grow by $147 billion in the next five years.
"We believe NFTs will transform how brands connect with customers, but only with seamless on-ramping and greater security," Bryant Barr, co-founder of Penny Jar Capital, stated.
