Why we invested in SuperRare, a digital art marketplace
Artist Credit: Furry Night by Muartive
Digital artwork is going mainstream and non-fungible tokens (NFTs) are opening-up a whole new category for collectible works of art. That’s why Samsung Next invested in SuperRare, a rapidly growing marketplace for collecting and trading unique, single-edition digital artwork.
We recently participated in a $9 million Series A round led by Velvet Sea Ventures and 1confirmation. Among the other investors in this round are Version1, Collaborative Fund, Shrug Capital, Third Kind, Marc Benioff, Mark Cuban, Chamath Palihapitiya, and Ashton Kutcher.
The market for digital art is exploding, and we think this is only the beginning. In March, for instance, a collage created by Beeple, aka Mike Winkelmann, sold for $69.3 million at Christies.
The fundamental problem SuperRare solves is that it builds a trusted community that gives artists direct access to buyers. SuperRare is helping to democratize art collecting, which has long been an opaque and exclusive market, inaccessible to most people. Now, for the first time, digital art is being made available online, at scale.
The curated platform facilitates authentication of an artist’s work and enables them to monetize their art in a metaverse in which the physical and digital worlds are converging. NFTs create digital scarcity and non-fungible assets. What that means is that data stored on a digital ledger, known as blockchain, certifies that a digital asset is unique and not interchangeable, it’s one-of-a-kind.
SuperRare uses the Ethereum blockchain to mint, transact, and to verify NFTs. It is also a curated platform. That means only approved creators can mint NFTs on its site. Minting NFTs entails creating a unique block of information that is signed by the creator on the Ethereum blockchain. The marketplace uses the ERC-721 NFT standard.
Each piece auctioned by SuperRare is authenticated, and tokenized as a crypto-collectible digital item that anyone can own and trade. All transactions are made using ether, the native cryptocurrency on the Ethereum network.
While the market for blockchain artwork is innovative, SuperRare is using a proven business model. There is a 3% transaction fee for all purchases on the platform, paid by the buyer. There is a 15% artist gallery commission for primary sales, and artists receive a 10% royalty on secondary sales. The ability for artists to automatically receive a percentage of secondary-market revenue is one of the ways in which SuperRare is utilizing the power of Ethereum smart contracts.
Of course, when we invest in a company, it is also because of the people. SuperRare was launched in 2018 by co-founders John Crain, Charles Crain and Jonathan Perkins. John Crain, the CEO, is a coder who worked with ConsenSys, a leading Ethereum software company. John and Charles are brothers, which means a high level of trust is built into the management team.
Crypto art and NFTs are still in their infancy. But we think that SuperRare is well-positioned to build the platform necessary to create a business masterpiece.
Sam Campbell is Global Venture Operations Manager at Samsung Next
If you’re a founder, we’d like to meet you.