RTFKT, the virtual fashion platform specializing in digital sneakers and other accessories, raised $ 8 million in funding in a round led by venture capital firm Andreessen Horowitz, citing plans to grow its team and build its online marketplace.
The company made headlines earlier this year after issuing NFTs – non-replaceable tokens – of virtual sneakers in collaboration with digital artist Fewocious. It sold for $ 3.1 million worth of product in seven minutes, with each pair costing $ 3,000 to $ 10,000. Investors are now looking to expand RTFKT development into the world of gaming and blockchain technology.
“RTFKT is at the forefront of building the bridge between digital and physical fashion … As we spend more time in virtual worlds, I believe we will care as much about our digital sneakers and handbags as our physical ones,” Jonathan Lai, a partner at Andreessen Horowitz who led the company’s investment in RTFKT, said in a statement. “Over the past decade, games have evolved from entertainment to social networking – for many people today, games are the new mall and sports bar.”
RTFKT was officially launched in January 2020 and became profitable that same year. The NFT boom has given the company a major boost: sales in 2021 are currently $ 4.5 million, compared to $ 600,000 for all of 2020. Founders Benoit Pagotto, Chris Le and Steven Vasilev are currently the only full-time employees, but will scale the team with engineers, designers and gaming experts to further develop tools for NFTs for gaming and augmented reality.
Access to capital has been a barrier to virtual fashion companies looking to scale up, with some investors wary of issues such as interoperability between platforms and utilities. Gaming, metaverses, and augmented reality experiences for virtual fashion are still in the early stages of development, and building out technology for each channel has its own unique challenges.
NFTs are also an evolving and sometimes volatile market, with cryptocurrency and NFT valuations fluctuating wildly. Yet RTFKT is increasingly showing that there is a lot of demand for its virtual products: a recent decline in collaboration with digital fashion house The Fabricant sold out in less than 15 minutes.
With this new funding, RTFKT hopes to expand the use case for NFTs by developing a companion app for virtual try-ons and content creation, along with other projects for its users to further connect with their purchases. The company will also use the capital to build its platform for NFTs and support digital designers who create them, with plans to launch a creators’ fund in the future.
“Our main long-term goal is to create a platform where we can attract new creatives, make money freely with their ideas, and truly embrace what’s possible with the use of NFTs,” said co-founder Steven Vasilev. “In the future, we will see NFTs as keys or passports to experiences, games or virtual events.”
Now’s a great time to be in the virtual world: Virtual experiences exploded during the pandemic, with Gen Z and millennials pouring money into products and services on online games like Roblox, which went public this year.
Traditional players also enter the room. In March, Gucci released virtual sneakers available for use in Roblox and virtual reality chat, as well as L’Oréal’s first line of virtual makeup products for Snapchat, Zoom, and other video try-ons.
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