New York Mets owner Steve Cohen attends a news conference at a COVID-19 vaccination site at Citi … [+]
RECUR, a company that launched in February focused on the nascent non-fungible tokens market, has raised $50 million of Series A financing and targeted college sports as its initial market.
The round, which values RECUR at $333 million, was led by New York Mets owner Steve Cohen, who invested through Digital, an investment fund he recently founded. Digital provided nearly all of the funding, with only one previous investor participating and taking a small stake. Cohen, who Forbes estimates is worth $16 billion, is the founder of Point72 Asset Management, and has joined RECUR’s board of directors.
The latest round comes after RECUR in late March raised a $5 million seed round from investors that included Defi Alliance, a decentralized finance accelerator; Courtside VC, an early-stage venture capital firm; Volt Capital, a cryptocurrency fund; entrepreneurs Joe Lubin, Gary Vaynerchuk and twins Tyler and Cameron Winkelvoss, who are active in the cryptocurrency sector.
RECUR signs licensing agreements with brands and companies, allowing it to create NFTs based on their intellectual property. Fans and collectors can then buy and sell the NFTs through marketplaces that RECUR creates as well as other marketplaces.
For instance, RECUR recently completed a deal with the Pac-12 Conference and its licensing partners, Veritone Inc. VERI and the Collegiate Licensing Co., in which RECUR will create NFTs based on highlights of memorable Pac-12 moments through the years.
The Pac-12’s NFTs will be part of a new website, NFTU.com, that RECUR developed that the company hopes will someday house NFTs for every college sports league in the U.S. RECUR says it is in negotiations with other conferences to license their videos, content, logos, mascots and other marks and use them for NFTs. It also expects to partner with college athletes and the agencies that represent them for NFTs, now that athletes are allowed to profit off their name, image and likeness.
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“It’s very fragmented in the college space,” said Trevor George, who co-founded RECUR with Zach Bruch. “Not even the colleges themselves own al the rights to various (intellectual property) like video footage, as an example. It’s really fragmented across colleges and conferences like the Pac-12 and companies like the Collegiate Licensing Co.”
He added:: “What we’ve done is we’ve brought everyone together, the individual colleges, the Collegiate Licensing Co., the video rights holders like Veritone and the conferences like the Pac-12 and we’ve created this centralized collegiate experience. Up until now, the only collegiate NFTs that have been out have been random, a la carte one-off drops by individuals or on a smaller scale. This is the first official, comprehensive destination for all colleges.”
George and Bruch, who serve as co-chief executives, have known each other for several years and are both alums of the University of Michigan, from which they graduated in 2011 and 2016, respectively. They had a mutual respect based on their entrepreneurship and business acumen, with George’s background in licensing and Bruch in cryptocurrency trading and marketing. But it wasn’t until late last year, at the urging of a mutual family friend, that they began discussing working together.
Bruch had been following the NFT space and seen the success of platforms such as NBA Top Shot, where fans could buy and sell video highlights of NBA highlights and digital moments. He thought it was like several years ago with cryptocurrency.
“It reminds me of the early days of crypto trading when it was still extremely fragmented,” Bruch said. “Large corporations, individuals and funds were interested in (crypto), but they didn’t really know how to get involved and didn’t feel comfortable with how they would get involved. Over time, the right infrastructure was built around that for them to be able to participate. I thought there was tremendous opportunity in the NFT ecosystem to build a robust, institutional-style platform that can handle the needs of large corporations and large global (intellectual property).”
He added: “We thought and firmly believe today that NFTs are the next frontier of commerce, they’re the next frontier of community, and it’s just a massive opportunity.”
Besides college sports, RECUR is in talks with brands and companies in the film, entertainment and pop culture industries as well as individual artists and musicians to create NFTs for them. Brach explained RECUR is “blockchain-agnostic,” meaning people who buy NFTs on the platform can take them and sell them on any other third-party platform. In addition, artists, musicians, companies and others that own the intellectual property will receive royalties whenever the NFTs are sold regardless of the platform.
During the past few months, NFTs trading for millions of dollars have received widespread attention, But RECUR expects most of the NFTs they are offering to sell for reasonable prices, even a few dollars apiece, to appeal to a wide audience.
“We take a mainstream approach,” Bruch said. “What hits the headlines the most is a $1 million deal here, $69 million deal there. But in reality, the fans of large, global (intellectual property) aren’t coming and spending $1 million. We want to make our price points more accessible, much more in line with perhaps a mobile app purchase that you would make.”
RECUR will use proceeds from the latest round to help consummate licensing deals and broaden its offerings. The company, which currently has 50 employees, is also looking to hire an additional 150 in the next few months. The founders expect the funding from Cohen and Digital will not only help them from a monetary standpoint, but from a strategic standpoint, as well.
This summer, Cohen’s venture capital firm, Point72 Ventures, announced his first cryptocurrency-focused investment, serving as the lead investor in a $21 million funding round for Messari, a cryptocurrency analytics firm. The RECUR co-founders noted that Cohen, an avid art collector, is bullish on cryptocurrency and NFTs.
“Beyond just being a name for money, they are the right partner for us because they really understand the future of where things are headed,” Bruch said. “They understand art, they understand traiding, they understand culture and community. They are the perfect partner for us as we embark on this next step of our journey.”
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Author: Tim Casey, Contributor