Over the last several years, shrewd marketers have introduced exclusivity and scarcity into their digital strategies for brands. Limited edition drops popularized by the sneaker industry serves as an example that has created unprecedented and often maniacal consumer engagement. The advent of NFTs represents a significant opportunity for brands to create additional digital engagement with their consumers. While the pairing of NFTs in e-commerce is in its earliest stages, brands are in need of thoughtful solutions that will help them execute against their strategies at scale. This is where Novel comes in. It’s a no-code platform that allows retailers to establish and distribute NFTs on Shopify alongside their physical products. The platform, which leverages the Polygon protocol, allows users to seamlessly get their NFT offerings up and available for sale without having to worry about the technological considerations or cryptocurrencies for $99/month plus 10% of mint fees and 1-2% on resale royalties. In addition to creating incremental revenue for brands, NFTs in e-commerce can be used for research and development, pre-launch sales, loyalty programs, provence and authenticity, community building, and even serve as the foundation for a brand’s launch in the metaverse. As the interest in NFTs grows, Novel streamlines the process for e-commerce merchants without the need for significant investment, specialized knowledge, and prolonged development times.
AlleyWatch caught up with Novel Cofounder Roger Beaman to learn more about the business, the company’s strategic plans, latest round of funding, and much, much more…
Who were your investors and how much did you raise?
The $6M seed round was led by Lerer Hippeau and includes additional investment from VaynerFund and Rothy’s Cofounder Roth Martin, as well as participation from existing investors, Sugar Capital, Costanoa Ventures, and many other strategic partners.
Tell us about the product or service that Novel offers.
Novel is a no-code platform available on Shopify that makes Web3 commerce as easy as traditional online shopping. It allows for the creation and sale of NFTs and digital services alongside physical goods by integrating on top of existing Shopify storefronts, making the cumbersome process of Web3 commerce accessible and approachable. Our platform is the first all-in-one Web3 tool on Shopify that handles everything from NFT creation and collection drops to feature-laying while handling all the programming and blockchain management responsibilities. This allows brands and creators to leverage the value of digital goods for building deeper, long-lasting relationships with fans and customers. For consumers, Novel makes it easy to purchase and interact with digital goods by removing the need to understand blockchain, cryptocurrency, or digital wallets.
What inspired the start of Novel?
My cofounders and I were introduced through one of our early investors, Costanoa partner John Cowgill. From our first conversation, we knew we wanted to start a company together. So, I think the motivation here was two-fold. We first bonded over our shared passion for Web3 commerce and the need for someone to create a platform that would democratize the emerging digital goods industry in a way that focused relentlessly on delivering genuine value to merchants and consumers. We also got along really well and shared the vision of sustainably building a high-integrity, high-intensity company that would thrive together long-term and feel like a family.
How is Novel different?
Our unique commerce platform is the only all-in-one, no-code solution that layers utility and functionality for NFTs, inclusive of the tools (i.e. NFT creation, deployment, feature additions, and blockchain management) needed to provide the best experience possible for both buyers and sellers. The frictionless and accessible process of creating NFTs with Novel, coupled with Novel’s secure end-to-end blockchain management, simplifies the creation of NFTs while making shopping for digital goods and NFTs as easy as traditional online shopping.
In addition to the streamlined NFT creation process and layering functionality, Novel stands alone in offering built-in collection creation tools with behind-the-scenes blockchain verification features that enable a seamless commerce experience for the creator and buyer. The current NFT process on the market is both expensive and cumbersome. The average creator needs to hire a sophisticated development team and have customers interact with multiple touchpoints (both on and off Shopify) resulting in a disjointed Web3 commerce interaction relative to the seamless experience that Novel can bring to life in minutes.
What market does Novel target and how big is it?
The market cap for NFTs already surpassed $40B in 2021, but we believe the applications and use cases of NFTs are endless, so the market we are targeting is limitless. One reason we decided to launch with a Shopify integration was that we understood the barrier to entry, especially for smaller and startup e-commerce businesses and creators. Novel creates an ideal Web3 on-ramp for these businesses and creators who can now, for the first time, unlock all the creative, loyalty-driving, and community-building aspects of NFTs without the technical know-how.
We have created an accessible and approachable platform for both buyers and sellers to drive overall market maturity and help creators and brands of all sizes connect with fans and customers in new and exciting ways.
What’s your business model?
Novel operates on a subscription model where partners pay a monthly membership fee ($99.99) to use the brand’s products and services. For collections created and sold through the Novel platform, Novel receives 10% of the “mint price” and 1-2% of the “secondary market royalties.”
What are your post-COVID office plans?
NYC is our home as a company but we have employees all over the world, many of whom I met through collaborations on open-source software. I’m excited to say that while coming into the office is fully optional, the conviviality of the culture we’ve created has many people on our team preferring an in-person experience, I consider everyone on our team a close friend and we’re creating an atmosphere where people come in because they genuinely enjoy spending time with each other. As we grow, I’m excited to welcome our team members abroad to join us in NYC, which is exciting for many of them. Being able to positively impact people’s lives in such a big way is the best part of starting a company.
What was the funding process like?
We were fortunate in the sense that what started as an early strategic angel round investment from Sugar Capital and Costanoa Ventures, quickly grew into a seed round from Lerer Hippeau and VaynerFund once word got out about the team we building, the problem we were solving and the focused approach on this particular aspect of the then segmented and then difficult-to-navigate Web3 space.
What are the biggest challenges that you faced while raising capital?
When it comes to an all-in-one NFT creation, utility, and sales platform we are the first of our kind. The emphasis we wanted to keep in mind was ensuring we were raising a responsible amount while setting a standard and good example for this industry that is still very much in its early days.
When it comes to an all-in-one NFT creation, utility, and sales platform we are the first of our kind. The emphasis we wanted to keep in mind was ensuring we were raising a responsible amount while setting a standard and good example for this industry that is still very much in its early days.
What factors about your business led your investors to write the check?
It was a combination of factors. For starters, the timing and size of the opportunity felt right. A year ago would have been too early to launch a company like Novel. The team of cofounders had a lot to do with investors trusting in our vision. From Brian’s proven entrepreneurial track record to my expertise in engineering, team building, and execution and Anna’s experience bringing frontier fintech products to market, we have the right mix of talent and know-how to make Novel a standout player in Web3 commerce.
What are the milestones you plan to achieve in the next six months?
We are focused on building credibility within the Shopify ecosystem. We also continue to integrate additional utility and value-add features for brands and creators interested in utilizing NFTs as part of their loyalty and community-building strategies.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
There are two quotes I’ll share from people I’ve met that inspire me. The first is from David Tisch: “startups are all about momentum”. There’s no statement on startups I’ve found to be truer. Starting from zero you need to constantly be building a palpable feeling of momentum and ultimately an air of inevitability. The second is from a former competitor of mine, Oisin O’Connor: “In startups, the question is not good or bad. It’s when”. Engineers particularly, including my former self, have a tendency to debate in terms of the ideal rather than the pragmatic. You always need to keep the ideal in mind, but you won’t get to the long-term goal if you don’t make it through the short-term.
The beauty of New York is that it is extremely diverse in so many ways but unified by an engaged, passionate mindset. I often feel that every person I meet has their own thing that they are excited about. I’m totally biased by my personal affection for this city, but I think it is easier to build that high momentum, pragmatic culture here than anywhere else on earth.
The beauty of New York is that it is extremely diverse in so many ways but unified by an engaged, passionate mindset. I often feel that every person I meet has their own thing that they are excited about. I’m totally biased by my personal affection for this city, but I think it is easier to build that high momentum, pragmatic culture here than anywhere else on earth.
Where do you see the company going now over the near term?
We want Novel to grow and become the homebase for creators building utility-based Web3 experiences on top of NFTs and the go-to platform for NFT discovery and the ever-growing list of potential benefits they can unlock for their fans.
What’s your favorite outdoor dining restaurant in NYC?
My family and I are pretty low-key, our favorite spot is our regular, The Green Kitchen at 84th & 2nd, fresh and local and somehow reasonably priced.
