When Asta Li and Henry Stern decided to launch their startup Web3, they decided to take a different approach than many others: build things that consumers actually want to use. The result was Privy, a wallet tool that powers the likes of Blackbird, a cool new food service that’s popped up in The New York Times– In addition to the Courtyard sports cards website.
Privy’s approach, which Stern describes as combining the modular and privacy benefits of Web3 with the easy-to-use interface of companies like Facebook, connects with consumers but also with investors. The startup revealed on Tuesday that it has raised an $18 million Series A round led by Paradigm and with participation from previous investors including Sequoia Capital.
Privy works with major companies to build blockchain-based services to complement their operations. In the case of Blackbird, launched by the founder of reservation service Resy, independent restaurants use Privy Wallet tools to stay in touch with customers and offer perks and rewards to regular customers.
While digital loyalty programs are not a new idea, Blackbird relies on cutting-edge cryptographic technology like private keys to incorporate the best features of Web3—particularly the ability to control access to data—into familiar, easy-to-use app designs. This includes Friend.tech, a blockchain-based social media app that broke new ground by allowing users to access Web3 features using their existing Twitter login.
“Consumer cryptocurrencies are here — thanks to cheap base-tier fees and the emerging software suite — and we’re excited to support Privy as a key part of that stack,” Matt Huang, founder of Paradigm, said via email. “My partner Caitlin Pentavorn has seen the power of Privy firsthand in her work with FriendTech, and we are excited to see the creativity Privy can help unleash across the cryptocurrency ecosystem.”
Privy also announced Tuesday that Huang, a former partner at Sequoia Capital and board member at Stripe, will join the startup’s board.
An alternative to the “Mad Max” crypto experience.
Stern says the idea for Privy came in part from his frustration with the current Web3 user experience, which typically forced users to jump through a variety of hurdles such as purchasing “wrapped” versions of digital assets. However, this raises the question of how carefully Privy plans to improve that experience while also maintaining encryption features.
According to Li, Privy’s primary goal is to provide tools that allow customers to connect their users to the blockchain no matter what device or browser they use — and then let customers decide which crypto-style features they want to add.
In Blackbird’s case, the “FLY” tokens offered by the restaurant app as rewards are managed on an internal system, making them more like Starbucks-style points than a crypto product. Stern suggested that this may change, citing a research paper from Blackbird indicating that it intends to make FLY exchangeable on Ethereum or another blockchain in the future.
Stern admits that companies using Privy are building “walled garden” experiences isolated from the broader cryptocurrency world. But he says that’s not necessarily a bad thing given that the wider Web3 world is still full of predatory scammers.
“People talk a lot about walled gardens. But what is the universe outside the garden? The image that comes to mind is of the desert Mad Max Fury Road,” he says, referring to the post-apocalyptic hellscape from the popular film series.
As an intermediate step between a pure walled garden and the widely open crypto landscape, Stern says Privy offers features that will allow users to “peek through the hedges” and, if they want, use their ability to control their wallet’s private keys as a means of exploration. In practice, this could eventually mean spending the tokens they collect at brands that sell everything from ice cream to sneakers.
For now, it’s still early days for Privy and it remains to be seen whether it will be able to build on the early niches it created to help Web3 break into the consumer mainstream. But for now, the focus on easy-to-use apps seems to be paying off, as the startup says it has more than 500,000 monthly users moving hundreds of millions of dollars through its wallets.