Rye is an online store that plans to use cryptocurrency tokens to create a less expensive version of “Spotify for eCommerce.”
Launching a new startup in the world of web3, Twitch co-founder Justin Kan and four co-founders have raised $14 million for Rye. The Chief Executive Officer (CEO) of the new venture will be Arjun Bhargava, a former Reddit engineer turned repeat entrepreneur with Kan as Head Of Sales.
In an interview, Bhargava addressed that Rye will offer a one-click application programming interface, or API, for merchants to display some or all of their products on Rye’s own marketplace. Rye will provide that directory for developers, to embed that code within their own sites and apps. Rye would effectively build an internet-wide guide of buyable products if those items could be viewed and purchased across the internet using its technologies, similar to how much of the world’s music is made available on streaming service Spotify.
He further clarified that the company sees itself more as “Shopify for web3.” Rye thinks it can do so much more affordably than retail giants like Amazon and Shopify by providing a crypto token, also named Rye, to participants. Rye’s founders asserted that by structuring as a token protocol, they will eventually be able to make money despite offering much lower fees in the fraction of a percent range.
By comparison, Shopify charges 2.4% to 2.9% per online transaction, in addition to subscription and per-transaction charges, and Etsy takes 6.5% of transactions, as well as a listing fee, Bhargava explained.
This is because Rye and its venture capital backers believe that, in the long run, their Rye token will gain popularity and value and be utilized to offer participants redeemable rewards comparable to the sector’s already well-liked cash-back programs.
“Merchants and brands that are selling products, especially DTC (direct-to-consumer) brands, they’re essentially getting ripped off,” Bhargava said. “We’re not getting a percentage of fees, we’re not going to raise fees over time, because we don’t have the ability to do that.”
Bhargava and Kan are joined by Cofounders Tikhon Bernstam, Jamie Quint, Saurabh Sharma, and Robin Chan, who will also work as a de facto “evangelist” for Rye, according to Bhargava. Bernstam, a former Parse, and Scribd co-founder will be in charge of the startup’s tokenomics. Quint, who was previously Notion’s head of growth and Reddit’s head of ads, will serve as the department’s head of product.
The Chief Technology Officer (CTO) will be Sharma, another ex-Reddit employee. The business development activities for Rye will be overseen by Robin Chan, a former employee of Zynga who also founded the firm’s Operator and Aiden. Chan also collaborates with Kan on investments at Kan’s fund, Goat Capital.