The Pitch Deck NFT Platform Hang is used to raise $16 million
- Hang is a Web3 startup that allows brands to offer NFT-based loyalty programs to customers.
- Co-founder Matt Smolin wants to revamp what he says is an outdated sector with blockchain technology.
- See the 10 slides Hang used to raise $16 million in Series A funding from investors like Paradigm and Tiger Global.
For many consumers, thinking about brand loyalty and membership programs conjures up images of airline miles and Starbucks rewards. Even as more big name companies get into the rewards game, many brands don’t offer anything at all in the way of loyalty programs.
Matt Smolin hopes to both reinvent how consumers view loyalty programs and convince brands that such programs are worthy investments with the recent launch of Hang, his startup that allows brands to build loyalty and membership programs using NFTs and blockchain technology.
“It’s wild to me how many big and small brands that you definitely know don’t have loyalty programs,” Smolin told Insider. “Everyone thinks of Starbucks and credit cards and airlines and just assumes that every brand has a loyalty program, but a lot of people don’t.”
And many brands that run loyalty programs do not have a good technical infrastructure. “They’re using pretty archaic software that’s hard to integrate, hard to change, hard to set up, and really, in all these cases, doesn’t fully motivate the users,” he said.
Earlier this month, Hang announced a $16 million Series A round led by Paradigm, which has invested in other major Web3 players such as FTX and OpenSea. Other investors in the round include Tiger Global, Kevin Durant’s Thirty Five Ventures, Mr. Beast’s Night Ventures and Good Friends, a venture capital firm started by the founders of direct-to-consumer giants Warby Parker, Allbirds and Harry’s. Hang also secured participation from major angels for the round, with Tiffany & Co. executive vice president Alexandre Arnault and Bombas CEO Dave Heath among the participants.
Other retail-tech companies have recently launched similar projects using NFTs to build customer loyalty.
This summer, Shopify launched a program that allows merchants to provide exclusive benefits to NFT holders. Founded by Outdoor Voices founder Ty Haney, Try Your Best allows brands to reward customers directly with NFTs, tokens and direct discounts. And Glow Labs, founded by two JPMorgan alums, offers Web3 brands ways to engage their customers with blockchain-based rewards.
Why NFTs make sense for loyalty programs
Smolin believes that Hang’s loyalty programs can increase lifetime customer value and help offset rising customer acquisition costs. Increasing how much customers spend with a brand is easier than trying to lower customer acquisition costs, he said.
But Smolin says current marketing and loyalty programs aren’t doing enough to engage customers and build value. He points to the resale potential of NFTs and their interoperability across the digital world as two key benefits of the technology. For example, a customer can resell a top membership status on a secondary marketplace, and brands that want to collaborate can connect their loyalty programs seamlessly.
While NFTs can be busy technologies, Smolin says the benefits blockchain offers brands go beyond the hype of limited downside or skyrocketing prices. While many brands have offered one-off Web3 projects and projects that Bored Ape Yacht Club has sold for eye-watering sums, Smolin believes building long-term loyalty is more valuable.
“At the end of the day, it’s so much more impactful for a big brand to get all of their users to spend 1% more per year or 10% more per year than it is for them to get 10,000 people to spend $400 once ,” he said.
Hang plans to use most of the Series A funding to expand his team, especially the product, engineering and sales teams, and to gain more brands as clients. It has already started working with brands such as Budweiser, Pinkberry and Bleacher Report.
Although brands aren’t entirely sold on Web3, Smolin believes Hang’s benefits will bring them along.
“I welcome skeptics because what we’re building is such a tangible utility for actual brands and consumers,” Smolin said.
