Square Alums Raise $11M for Highlight, the 'Fan Club of the Future'
The music and entertainment industries have emerged as some of the most promising fields for crypto and NFTs—offering an alternative to a streaming-based business model many view as broken—by providing new ways for artists to connect with their fans.
The latest example is Highlight, a crypto startup founded by two former executives of Square (now known as Block), that on Tuesday announced an $11 million funding round led by Haun Ventures.
Highlight offers a full suite of Web3 services, such as smart contracts and community-building tools, packaged in an easy-to-use interface. The idea is to let artists easily create things like NFT drops or gated communities, and to let fans easily purchase such offerings with crypto or a credit card.
In an interview with Decrypt, Highlight co-founder Nathaniel Emodi described the service as "the music fan club of the future." He added that while many of its early clients have been musicians, Highlight can help a wide variety of creators and entrepreneurs such as writers or craft bakers.
In Emodi's view, Web3 is superior to earlier alternatives when it comes to developing fan communities, but some clunky designs have prevented the technology from reaching its full potential. That's why, he says, Highlight is designed to let fans participate using either crypto wallets like MetaMask or more familiar tools like credit cards and browsers.
Under the hood, Highlight uses the low-cost Polygon network and studio for all token and NFT operations, allowing the company to further reduce friction by not having minting or transaction fees.
For creators, Highlight has the potential to help them jump-start the reach of their fan communities by offering a suite of perks such as exclusive access to Discord rooms or NFTs that serve as backstage passes at live events.
"The whole platform is self-serve [and can be used] if you’re building up to 1,000 true fans, and you only have 10," says Emodi, referring to the popular notion that Web3 makes it easier for creators to support themselves with a small but loyal fanbase.
Meanwhile, artists can also use Highlight to offer tokens that give fans a share of the revenue from certain songs or other works. This idea has been gaining considerable traction in the music world, as exemplified by another startup called Royal that recently raised $55 million and has helped the rapper Nas and other famous artists issue tokens to fans.
As for Highlight, the startup is just emerging from stealth after being founded a year ago, but it already has a number of music clients, including a popular DJ known as Moon Boots and the rock trio City of the Sun.
For now, the idea of Web3 transforming the economics of the music industry is still relatively unproven, but the thesis feels compelling. The ultimate success of startups like Highlight is likely to turn on their ability to execute easy-to-use interfaces that will provide fans with the benefits of Web3 without the complications.
In this, Emodi and co-founder Kevin Matthews may be well-served by their experience at Square, a company known for smooth user design and easy-to-use products.
In addition to Haun Ventures, firms like Polygon Studios and Coinbase Ventures contributed to the funding round, as did individual investors such as Coinbase's Gokul Rajaram, Linda Xie, and Compound founder Robert Leshner.Source