Coinbase and Haun Ventures invest $11 million in Neynar, a toolbox for Web3 social networks (2024)

A company that provides tools for developers to build decentralized social networks announced its Series A funding on Thursday. Haun Ventures led the $11 million raise for Neynar, with participation from a16z‘s CSX, Coinbase Ventures, and Union Square Ventures.

Most developers who currently use Neynar’s services are building social applications on Farcaster, although the company aspires to become the go-to inventory for developing on any social protocol. Farcaster is an open-source protocol with over 378,000 users who own and control their data; for developers, they can use it to build social applications without seeking permission from the network. Last week, it announced it has raised $150 million in funding, with a similar roster of participants to Neynar’s.

So, is betting on Neynar just a proxy bet on Farcaster? Breck Stodghill, a partner at Haun Ventures, told Fortune that Neynar is meeting the social developers where they’re at, and this just happens to be Farcaster. “It doesn’t mean that they won’t expand to other protocols and infrastructure later on,” he says.

When describing to Fortune how Neynar fits into all of this, cofounder Rishav Mukherji drew comparisons to what cloud computing does for internet users. That is, it offers a service for remotely storing files, applications, and data, eradicating the need for desktop computers to always be online and providing insurmountable memory.

Before Neynar, the only way for developers to bring their new ideas to life on Farcaster was to run what the network calls a “hub,” Mukherji explains, which are a bit like storage units for data. But running a hub costs hundreds of dollars each month. “That is a distraction from what you’re actually trying to do. It’s way simpler, easier, and faster to start with what we provide than build everything from scratch,” he says. Neyner essentially runs the hub for you, from $9 per month.

‘People started paying us immediately’

Both platforms are independent companies founded by Coinbase alums. The Neynar team first entered the Farcaster ecosystem in 2021, when building its own consumer app atop it. “We wanted something to play around with,” Mukherji says. In the process of creating it, Mukherji found he was accumulating a flurry of in-house infrastructure tools.

“As an experiment, we put up a landing page that said, ‘Hey, we have this infrastructure, if you want access to it, you can pay us,’ and there was a checkout link,” he recalls. “People started paying us immediately.”

Of the tools that Neynar provides for developers, perhaps the most essential are its APIs. One of these is an endpoint that shares immediate data about Farcaster, the underlying protocol. For example, this might be a user’s profile information, casts, and follows—any social data that’s relevant for building.

Another tool: writing data back to the Farcaster protocol.“Let’s say you wanted to write ‘Hello, world.’ You send us that text, we sign it with the private keys we have for you, and we push it out to the network. You wouldn’t have to worry about any of this,” he explains. Another popular service is “web hooks,” where if an issue arises on Farcaster, updates are automatically sent straight to the developer.

Developers are the ‘lifeblood’

But for decentralized social networks like Farcaster to truly take off, they must attract everyday consumers outside of crypto’s core community.

“Users will not simply move to on-chain social protocols because they’re decentralized and creator friendly. It will take time, a fast-growing developer ecosystem building novel products, and a strategic go-to-market to convince users to move over,” Stodghill said in a statement.

How does Neynar view this obstacle?

Mukherji says the platform is playing a “pretty key” role in this journey because it minimizes touch points between crypto-weary users and the underlying blockchain, creating an experience similar to Web2 apps like Instagram or X.For instance, one customer, Drakula, is focused on short-form video and creator monetization, similar to TikTok. Neynar has allowed it to abstract away the moments where users would otherwise have to engage with Farcaster (the underlying protocol), like paying fees, setting a username, or coordinating a private key.

“For Farcaster to do well, the protocol needs to be able to break past a crypto niche. But it’s critical first that we saturate a crypto niche,” Stodghill told Fortune.And developers are the “lifeblood” of achieving that, he says.

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Coinbase and Haun Ventures invest $11 million in Neynar, a toolbox for Web3 social networks (2024)


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