Building a Sustainable IP Ecosystem: Story Secures $83 Million in Funding
Startups like OpenAI, Anthropic, and Stability AI have recently faced criticism for their misuse of intellectual property (IP) owned by others. In response to this issue, a new startup called Story has raised $83 million in funding to develop a blockchain-based platform that aims to help IP owners track usage more effectively. Led by Andreessen Horowitz’s a16z crypto division, the funding round also included participation from Polychain Capital, Scott Trowbridge (SVP of Stability AI), Adrian Cheng (K11 Founder), and Cozomo de’ Medici (digital art collector). With this latest investment, Story’s total funding now stands at $143 million.
Story’s CEO, S.Y. Lee, envisions building a more sustainable IP ecosystem for the digital age. The startup plans to use blockchain technology to enable IP owners to assert their ownership, set usage parameters, and allow others to license and use their content. Comparing IP to Lego, Lee believes that anyone should be able to remix and fork IP while still allowing the original creators to capture the upside. The irony of using “Lego” as a metaphor is not lost, as Lego has faced numerous IP battles over the years.
Capturing the value of IP can be highly lucrative for license owners, potentially bringing in substantial revenue. In anticipation of the platform gaining traction, Story’s own value has skyrocketed, with a post-money valuation of $2.25 billion. This demonstrates the market’s confidence in the startup’s vision and potential impact.
Story has already partnered with fashion design tool Ablo, Japanese comic platform Sekai, and art collaboration startup Magma, resulting in more than 200 teams and over 20 million addressable IPs being registered on the platform. While the exact workings of Story’s IP blockchain remain to be seen, the startup plans to continue building out the product and launch it commercially later this year. Currently, Story has been adding users through a free closed beta.
Chris Dixon, who co-led the investment for a16z, believes that advancements in generative AI and similar technologies will disrupt traditional economic models in the art, literature, music, and content industries. To ensure creativity continues to thrive, new ways of monetizing IP need to be introduced.
Dixon explains that AI-powered search engines already provide comprehensive answers instead of directing users to websites, while social networks increasingly feature AI-generated images and videos. However, these AI systems often lack proper attribution or compensation for the original creators. This lack of incentive to publish original creations on the open internet highlights the need for a solution like Story.
While AI systems are just one application for content, they play a significant role. Sahara AI, another startup addressing IP tracking and monetization in the age of AI, recently secured $43 million in funding. Story differentiates itself by focusing on the IP and data layer of AI solutions, rather than the existing AI infrastructure stack. However, Story sees potential for partnerships with other players in the space, such as Sahara and Ritual.
Story’s co-founder and CEO, S.Y. Lee, has firsthand experience with content in the digital age. He founded byline.com, a platform for journalists, and later created the serialized fiction app Radish, which he sold to Kakao for $440 million. Story represents the natural progression of Lee’s previous ventures, aiming to build a different model for creators to avoid pouring billions into marketing.
The success of Story’s model and its adoption by creators are questions that remain to be answered. However, investors bullish on the future are comparing Story’s impact on content and IP to what Bitcoin did for money and finance. With advancements in AI triggering a new phase in Web3, Olaf Carlson-Wee, founder and CEO of Polychain Capital, believes that Story will revolutionize the concept of IP.