Two longtime Seattle-area technology leaders are teaming up for a new startup that sells NFT-based customer engagement technology to consumer-facing companies.
Former Starbucks CEO Adam Brotman and startup investor Andy Sack raised $10 million for Forum3.
The fresh funding comes after co-CEOs Brotman and Sack recently advised Starbucks on the launch of Starbucks Odyssey, the coffee giant’s new NFT initiative that allows Starbucks Rewards members to earn and buy collectible digital stamps, then buy and sell them on a marketplace with other members of the loyalty program.
Through its technology platform, Forum3 plans to work with brands to remove the usual frictions that come with blockchain technology, such as having a crypto wallet or owning cryptocurrency. Users will be able to engage with a company’s customer loyalty platform with credit cards and phones. The goal is to sell a white-labeled version of the Odyssey to other consumer-facing brands, Sack told GeekWire.
The startup plans to target other medium to large companies in industries ranging from consumer packaged goods, hospitality and travel. It will make money through licensing, royalties and other service fees. Sack said Forum3 will be “chain agnostic,” meaning it will eventually work with all types of blockchain platforms.
The startup’s first project was a three-stage NFT “drop” with author and screenwriter Ben Mezrich, and it also helped land a collaboration with the Boston Globe. After that, in April, Starbucks executives reached out and Forum3 became strategic advisors to Odyssey.
There are a number of players in the Web3 loyalty space who advise brands and individuals on NFT-based loyalty technology. Hang recently raised $16 million and works with brands like Budweiser and Bleacher Report. Sack said Forum3 will be able to compete because of his and Brotman’s experience and connections.
“The use case that we’re applying to blockchain, I think is going to be the dominant consumer use of blockchain,” he told GeekWire.
Sack co-founded the Seattle-based investment fund Founders’ Co-op, then led Techstars Seattle for five years, with a cohort that produced three unicorns. After that, he worked with Microsoft CEO Satya Nadella as a consultant for innovation and digital transformation. Most recently, he was an investor in the blockchain native venture fund Keen.capital.
Brotman is the former chief digital officer at Starbucks, where he helped build the Starbucks mobile app, which now handles more than a quarter of the company’s orders. He is also the former CEO and current Chairman of Brightloom, a startup that helps businesses turn their customer data into personalized marketing campaigns.
“We have an understanding of how we work with big brands,” Sack said. “There will be aspects of our platform that will be very different from the standard players in the space.”
Blockchain startups have struggled to secure funding this year, part of a broader market downturn and flurry of negative headlines looming over the crypto space. Venture capitalists distributed just $4.44 billion in crypto-related companies in the third quarter of the year, Bloomberg reported, down 37% from the same period last year.
The rapid collapse of the giant digital asset exchange FTX last month also sent a contagion through the crypto industry.
Sack said that some people have “built Ponzi schemes and scams around crypto and these tokens, and they have no use in the world.”
“All that is somewhere over in left field,” he said. “We are far away in a completely different room. We have a real business case.”
The funding round was led by Decasonic, with participation from Bloccelerate, Liberty City Ventures and Arca. Other investors include Polygon Ventures and Valor Siren Ventures.
