SY Lee, Co-founder and CEO of PIP Labs
PIP Lab
In 2015, Andreessen Horowitz’s Chris Dixon wrote about how PC games were leveraging online user contributions to generate new revenue. Serial entrepreneur Seung Yoon Lee took this lesson to heart, realizing that the gaming industry’s approach to intellectual property (IP) – encouraging experimentation rather than fighting it out in court – is something the newspaper, publishing, and music industries could all learn from. Now, Lee is providing that opportunity to the industry with his “IP blockchain” story.
Today, PIP Labs, the company behind Story, announced an $80 million Series B round led by a16z crypto, with participation from Scott Trowbridge, SVP and Director of Polychain, Stability AI, Adrian Cheng, founder of K11, and digital art collector Cozomo de’ Medici. This marks the second time that Andreessen Horowitz’s crypto arm has led three funding rounds in one company; the first was with Coinbase, the largest cryptocurrency trading platform in the U.S.
Jason Chao, co-founder and CPO of PIP Labs
PIP Lab
Story Protocol operates on the premise that intellectual property can be transformed into liquid assets, facilitating the creation of programmable IP. Co-founder and chief product officer Jason Zhao, who previously led product development at Google’s AI lab DeepMind, likens it to “Lego”: blocks programmed with metadata defining pricing and usage restrictions that enable automated delivery to creators. This creates a positive feedback loop, according to Zhao and Lee, allowing creators to experiment with confidence that they have permission to use the assets, while IP owners benefit from a cut of the fees and a steady stream of user-generated ideas. Lee pitches this as a “two-pronged approach”: cutting the cost of middlemen managing contracts and disputes, while also capturing new revenue streams from fan fiction, remixes, and AI tools trained on that data.
Story was initially built on Ethereum’s test network, Sepolia. While Ethereum has the capacity to host complex applications, it is known for its high costs and slow speeds. However, PIP Labs plans to launch its own blockchain on August 27th. The move will give the company greater technical control to implement features such as on-chain dispute resolution. More than 200 teams representing over 20 million IPs are preparing to launch apps on the blockchain, including Ablo, which allows users to try out designs for famous brands, and Sekai, a manga and anime storytelling experimentation platform.
Li and Chao are not the first to explore blockchain’s potential for IP management.
Solana
This technology could fundamentally change how we manage IP if we can convince creators, AI developers, gamers, and others to embrace blockchain instead of circumventing it. Intellectual property infringement occurs in many ways, from AI companies training models on news articles without consent to teenagers recreating beloved book characters on platforms like DeviantArt. Some intentionally evade the law or avoid gray areas, while others simply avoid making payments or entering into contracts because they believe they are unlikely to get caught. The scale of intellectual property theft is so large that it is estimated to cost the US economy up to $600 billion annually. For Story to succeed, a wide range of users will need to choose to secure rights to their assets through blockchain rather than maintaining the status quo.
Lee is optimistic, drawing parallels to the success of companies like Spotify, which gained more than one million U.S. users in its first year and quickly overtook music piracy sites. Spotify’s ability to convince users that a legal alternative was more convenient and enjoyable than piracy was key to its rapid adoption. “They did it with an incredible UX,” he says. [user experience]”Lee is confident that developers attracted to Story will be able to create applications that make experimenting with IP just as compelling.”
“Creators need a modern way to ensure they are compensated for their work. Story takes a proven approach to intellectual property law and updates it for the age of AI,” said Andreessen Horowitz partners Chris Dixon and Kara Wu. Forbes Prior to the announcement.[Lee] He has consistently impressed us with his combination of big-picture vision and world-class tactical execution.”
Like other blockchain initiatives, Story attracts developers by offering a range of incentives, including grants, marketing support, technical assistance and fundraising guidance. These resources are provided through the Story Academy, a comprehensive program with a six- to seven-week accelerator for mid-stage projects and a 12-week incubator for early-stage ventures. The incubator, which began accepting applications in early July and will launch in September, will provide participants with $10,000 to $20,000 in seed funding, with the possibility of securing up to $50,000 once key milestones are reached. Meanwhile, participants in the accelerator program can receive an average grant of $50,000, with the opportunity to win up to $100,000. This approach helps explain why Story has raised more than $140 million in three funding rounds since May 2023.
The company also works with legal experts and consultants, including Fenwick, Latham and Granderson Des Rochers, to provide guidance on crowdfunding, community building and licensing, and with these experts and consultants, the company is developing liquidity and capital formation products for IP owners and studios.
Lee emphasizes that Story’s mission is to address real-world challenges in IP management, especially as generative AI creates new urgency for integrating copyright agreements into digital assets. “Everyone is training on other people’s data, and there’s no way for IP to be compensated,” Lee warns. “If this continues, it’s like ‘Google kills journalism’ multiplied by 1000. We want to protect IP.”
