Crypto startup IYK raises $16.8 million to verify authenticity

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Crypto startup IYK raises $16.8 million to verify authenticity

If you want to flaunt your $1,200 Gucci handbag to your friends, there may be a skeptical few who doubt whether it's truly Gucci.

But IYK is here to help you secure those much-deserved bragging rights, announcing on Thursday that it's raised $16.8 million in the past year to help customers verify the authenticity of their apparel and merchandise.

The crypto arm of Andreessen Horowitz, a16z crypto, led the funding. Other participants include Collab Currency, Lattice Capital, 1kx, Synergis Capital, Palm Tree Crew, Coop Records, and the prominent non-fungible token collector gmoney. IYK cofounders Ryan Ouyang and Christopher Lee declined to provide their startup's most recent valuation.

A16z crypto's general partner, Arianna Simpson, said in a statement.

IYK's fundraise is a comparatively large for an early-stage startup, particularly in a parched funding landscape where venture capitalists like a16z have become more tight-fisted and NFT-based projects, like IYK, have progressively called it quits.

The pair, Ouyang, 22 and Lee, 34, are an unlikely duo. When they first met on Discord, a messaging service popular among crypto enthusiasts, they started messaging each other anonymously in 2021. Lee was then software developer for Major League Baseball and Ouyang was taking time off from college. Ouyang told Fortune he was laughing.

The two were soon friends and eventually settled on an idea for a startup: Implant NFC chips-most smartphones sold today are equipped with the tech-into merchandise, which allows customers to simply tap their phones to a patch on, say, T-shirts to verify their authenticity. Businesses can now monitor who owns their goods and maintain contact with customers, too.

Chipping T shirts isn't a new idea, and there are other startups trying to progressively turn our clothing robotic, but Ouyang and Lee believe they have an edge. s kind of unique about our strategy is this flexibility and accessibility part, he said.

Brands can customize how clients claim ownership of a product through the number of times and duration they have to tap their smartphones on a chip.

Ouyang and Lee pitched their idea around and eventually landed a spot in a16z's Crypto Startup School, a Y Combinator for aspiring crypto companies, and recently teamed up with Adidas. The fund raised its most recent influx of capital for IYK, which stands for 'if you know,' as the program ended.

'' s a chip hidden behind that patch and that it's like a portal to this whole digital universe,'' Ouyang said.