Building Blocks for Tokenized Media
Our Investment in Pinata
Beneath the volatility, speculation, and controversy around NFTs, there is a significant transformation underway around the concept of ownership on the web. NFTs are digitally scarce, unique, programmable assets that make the internet ownable. And as we’ve said before when announcing our Magic Eden investment, we believe this technology will enable a new generation of creators, and has potential to reshape digital media as we know it.
If you’re one of the millions of people who have interacted with NFTs, you’ve likely interacted with Pinata. Pinata provides a suite of tools to manage and serve media, enabling creators and developers to serve content quickly, reliably, and securely across any blockchain. With Pinata, creators have the power to create membership, paywalled, or personalized blockchain content – giving more surface area to how projects can experiment with the way media is served online.
We met the Pinata team in early 2021, as NFTs were starting to become mainstream. Initially impressed by the team’s trust with developers and early partnerships with the largest NFT platforms, we co-led a previously unannounced seed with our friends at Offline Ventures. Since then, Pinata has seen quiet, yet explosive growth – both through the bull market of 2021 and in today’s bear market. We are thrilled to co-lead the Series A alongside Pantera Capital, with participation from Offline Ventures, Volt, Alchemy, Opensea, and a handful of other angels and crypto platforms.
Founders Kyle Tut and Matt Ober started Pinata in 2018 at the ETHBerlin hackathon, originally working on a decentralized storage solution. Through their experiences building in the early days of Ethereum, they understood that storing content on-chain was expensive, and the leading storage network for off-chain data (IPFS) wasn’t suited for production applications. They built a solution to make IPFS stable and reliable enough for storing off-chain data at scale, and long believed that the killer use case for this kind of a storage network would involve NFTs. Yet, while NFTs existed at this point, the market was slow to take off. For two years Kyle and Matt bootstrapped the company, and focused on building developer relationships. By Spring 2020, their hard work started to pay off. Developers of the most notable NFT apps were integrating with Pinata to manage their media, and Pinata essentially indexed the bandwidth growth of NFT projects and platforms.
In early 2021, spurred in part by digital sports collectibles like NBA Topshot, NFTs exploded. Amidst the hype and flashes in the pan, Kyle and Matt stayed true to their Midwestern roots and focused on building the best product in the market for their growing developer base. That steady mindset helped the team weather previous winters and continues to keep them laser focused on the long-term opportunity. Today, more than 240,000 users along with leading marketplaces and platforms like Opensea, Yuga Labs, Autograph, DappRadar, DraftKings, SoundXYZ, Sorare, Foundation, and more use Pinata for storage and media management needs. And since our seed investment, Pinata has continued double-digit monthly revenue growth and has grown >40x year-on-year.
While early applications of NFTs have been focused on art, profile photo (PFP) communities, and collectibles, we’ve only seen the tip of the iceberg. As NFTs expand beyond static images to other media types like games, music, videos, and even websites, Pinata is well positioned to provide the infrastructure for any type of digital ownership and enable developers to get more creative with what NFTs can unlock. Pinata has already built features to enable NFT developers to build more customization and controls, like dedicated gateways or submarining, which allow users to configure privacy and permission and token-gate content at the file level. As today’s wave of NFTs move beyond collectibles to memberships and experiences, this functionality is core. If this future piques your interest, Pinata is hiring!