Genies, a digital avatar company known for its high-profile relationships with celebrities like Justin Bieber, Migos, and Cardi B, just released “The Warehouse,” its long-awaited NFT retail. During its most recent funding round, a $150 million Series C round that was announced in April, investors like Silver Lake and Mary Meeker’s Bond Capital valued Genies at $1 billion.
TechCrunch reported at the time that the Los Angeles-based startup worked with NBA Top Shot NFT developer Dapper Labs to build a shop on Dapper’s Flow blockchain. The shop opened in December 2017 to a small group of invited test customers. In an interview with TechCrunch, Genies CEO and creator Akash Nigam said that The Warehouse is now open to the public. This means that anyone can now download the Genies Studio app to make their own avatars and buy digital fashion items to dress them.
Nigam said that Genies is working with a hand-picked group of designers to make the first set of collections for the marketplace. One of the first collections will be designed by fashion photographer and influencer Tati Bruening, also known as @illumitati on Instagram, where her campaign to “Make Instagram Great Again” went viral.
He also said that users can use tools inside the app to change the clothes they buy, so they can make their own versions of pieces from these collections.
“Creators will be selling their own avatar fashion, and the ones that they’ve customized over the past couple of months. And when they do sell out — let’s say someone sells like 100 items, and let’s say that if a fan or follower or anybody within the community decides to buy it for their own avatar, they also now have the rights to be able to edit it or DIY it within the studio platform, so they can use the tools and create a derivative collection, and then sell the derivative fashion line in The Warehouse,” Nigam said.
He said that since each item is an NFT, the original designer gets a cut of the money from each sale and owns the intellectual property behind the creation. Nigam said that Genies charges a 5% fee on each sale, which lets sellers keep most of the money from each transaction. This is different from the 50%+ fee that Meta charges for NFTs in its Horizon Worlds metaverse. (Meta is also moving forward with its NFT goals. Earlier this week, it announced that users would be able to share their NFTs on Facebook and Instagram. In June, it started selling its own digital clothing).
Meta isn’t the only tech company trying to make a name for itself by helping people make digital avatars. In July, Reddit started its own NFT avatar marketplace, and earlier this month, the Estonian company Ready Player Me got $56 million from a16z for a similar purpose. Genies is doing well in the industry thanks to connections with celebrities and its own staff. Former Disney CEO Bob Iger is an investor and board member of the company.
At first, only authorized vendors on the Genie platform will be able to publish collections, but the business plans to let all users eventually make one-of-a-kind fashion items. Genies has already tried its hand at fashion. In 2020, the company teamed up with Gucci to let the store’s customers try on new virtual designs and buy handpicked digital products.
Nigam is optimistic about the long-term need for digital avatars. He compares them to the importance of mobile apps on the internet, even though NFT sales are going down and cryptocurrency prices are still low.
“Because of two big consumer trends that are getting stronger right now, I think that avatar ecosystems will be the mobile applications of web3. There is one trend, which is the virtual trend, which is obvious. Nigam said, “Everyone wants to live in a 3D space universe.”
Second, he said that avatars give users ownership and personality in the digital world.
“I think a lot of creators understand that they’re contributing so much back to all these different platforms, but they’re not reaping nearly enough of the benefits,” Nigam said.
Even though NFTs are a big part of the business plan for the new company, he didn’t want to market and sell it as an NFT company. He said that Genies’ target market is not crypto-native users who see NFTs as financial assets, but the cool kids of Generation Z who use the internet. He also said that 85 percent of The Warehouse’s waiting users are women.
Nigam said, “The mentality around this is so different, like, people are just obsessed with the actual digital fashion itself and creating your dream closet,”
Nigam wants the company to grow into a full-fledged social network, which Generation Z “craves,” according to him. He says that Facebook and Snapchat are really just messaging apps, but Instagram is having a “identity crisis.” With the release of the app and shop, the company has moved one step closer to realizing his vision of Genies as an online community where people might meet other like-minded people by chance.
“I don’t think people are even thinking about like, oh, if I buy this as an asset, do I get to unlock X, Y and Z, and does it accrue in value, and can I sell it one day,” Will it appreciate in value? Can I one day sell it? “They’re just like, I just want to make dope shit, and then I want to kind of trade it and collaborate with my friends and make it too.”
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