One of the world's elite venture capital firms is spurring the launch of a Nashville startup, leading a $25 million seed round. The local company is about as futuristic as it gets — residing in a new concept for the internet and meshing digital assets with cryptocurrencies and blockchain technology.
Company name: Gesso Labs Inc., which is launching Co:Create.
The chief: The CEO and co-founder of Gesso and Co:Create is Tara Fung, formerly chief revenue officer with fintech platform Alto Solutions. Alto allows users to invest their retirement accounts in startups, crypto and other assets. "It was at Alto, where we focused on alternative investments, that really made me go deep on crypto," Fung told Nashville Inno.
The backdrop: Co:Create is a part of what's being called "web3" (The New York Times has a great explainer here). Web3 is envisioned as a new concept of the internet that's underpinned by blockchain, which is a digital ledger shared by many computers and not one central source. Cryptocurrencies, such as Bitcoin, have their own blockchains (and thus don't involve a central bank like a traditional currency). Crypto is often used to buy non-fungible tokens, or NFTs — "a digital asset that represents real-world objects like art, music, in-game items and videos," Forbes writes.
Where Co:Create steps in: It's aimed at enabling people and brands that are producing NFTs to elevate those from one-time transactions — someone buying an NFT — into other ways to generate money beyond that initial NFT deal and also from others interested in their brand. Fung calls Co:Create a "factory method [that] acts as a customizable template" allowing brands to launch their own digital currency tied to its NFTs and make other moves to expand their reach.
"Right now, they're basically digital baseball cards, a collectible," Fung said. "Only a few thousand people actually own a Bored Ape. But their community around them is actually millions. We help web3 brands focused on NFTs … expand their communities drastically and incentivize all the promises of NFTs. They can be programmed to do more. They can be your entry card to a unique messaging group or event … or to get access to exclusive merchandise, goods, services. But the infrastructure to do that is really rudimentary now."
Where it's based: Nashville is the headquarters, said Fung (who is in the 2022 class of the NBJ's 40 Under 40 awards). Another senior executive will be based in Nashville; Fung declined to identify that person, saying that the person is still transitioning out of his or her existing job. "We'll be fully remote, so we're hiring all over, based on talent," she said.
Amount raised: A $25 million seed round, valuing the startup at $125 million, Fung said.
Lead investor: Andreessen Horowitz, the titanic Silicon Valley venture capital firm that also goes by a16z (for a sense of scale, they closed on three funds in January totaling $9 billion). Gesso Labs is among the very first Nashville-area companies to land money from the firm, joining oncology startup Thyme Care. (Another notable tie: Shane Mac, co-founder and president of Andreessen-backed XMTP Labs Inc., has relocated to Nashville. XMTP is building a communication and network system for blockchain users).
Other Co:Create backers: Amy Wu, who's now at crypto-exchange FTX leading a $2 billion venture fund; Los Angeles-based Autograph, an NFT platform co-founded by iconic NFL quarterback Tom Brady; VaynerFund, which is tied to serial entrepreneur Gary Vaynerchuk; Packy McCormick's Not Boring Capital venture fund; the teams behind virtual shoe company RTFKT (pronounced "artifact") and fractional.art.
Why it matters for Nashville: The involvement of a legendary Silicon Valley player such as Andreessen Horowitz is a head-turning and status-raising moment for Nashville's tech and startup scene. Co:Create also represents a new type of tech company in the area, bringing the kind of diversity that tech community leaders have been seeking.
In her words: "Say you buy a Tiger Woods NFT from [an NFT platform]. You'd get tokens from [that platform], almost like your [airline] mileage or rewards system. And those tokens, which are cryptocurrencies, can be used to buy goods and services within [that] brand."
But, the market: Cryptocurrencies have been particularly volatile lately, in step with declines in the stock market. Fung's reaction? "The fact that markets are in a tizzy … doesn’t change much when your perspective is focused on decades, not days," she wrote on her LinkedIn page. "Builders will build during bear markets."
How she got to Nashville: Fung is from China Grove, North Carolina, a city of 4,000 people. She previously worked in New York City. After several years there, she and her husband felt "tired of it." In 2019 they explored three cities: Los Angeles, Austin and Nashville. "I could have sworn Nashville would not win. [I thought] 'I work in tech and tech is not in Nashville, this is not an option,' " Fung recalled. Then she visited and cold-called folks such as Chase Gilbert and Scott Sohr — of Built Technologies, which now has a $1 billion-plus "unicorn" valuation — and the CEO of Blueprint Title. "The ecosystem is small, but it is here, and it was the most welcoming community I’d been in," Fung said — so much so that she made the move and flew back and forth to New York each week to continue working there before joining Alto.
What's in a name: Gesso is the Italian word for chalk (pronounced with a "j" sound at the beginning). Gesso "is a primer applied to blank canvases that serves as the foundational layer all other paints adhere to," Co:Create said in a press release. "Our name speaks to what we aim to deliver: tooling and infrastructure that empowers creators to realize the promises of web3."
