Nov 11, 2022
This post is written by Arjun Bhargava, CEO and co-founder of Rye.
Over the last few years, with COVID hitting and forcing the world to head more online, two industries have undergone drastic changes: web3 and eCommerce.
In web3, we’ve seen some massive inflection points: the development of faster and cheaper blockchains, a new ecosystem of apps being built on-chain, and broad consumer adoption. In eCommerce, retail has shifted online, consumers are buying products in new, innovative ways, the economics of selling online has gotten way more complicated, and social commerce is on a massive uptrend. The mission of Rye is to lean into these changes and build the foundation for the next generation of eCommerce.
Rye started with a text in early 2021 from Jamie Quint — a friend and former colleague at Reddit, who led its monetization efforts and, more recently, was Head of Growth at Notion. He wanted to know if I could hop on a Zoom with his friend and former co-founder of Twitch, Justin Kan, to “incubate a project idea we have in crypto.” It was a life-changing text for me: “Hell yea! I love what Justin’s built,” I responded.
When I joined that call, I was greeted by four amazing, seasoned entrepreneurs who would eventually become co-founders in Rye.
Justin Kan, who co-founded Twitch
Tikhon Bernstam, who successfully exited two companies: Scribd and Parse
Robin Chan, an early Zynga employee and founder of Operator
And later, my other former Reddit colleague, Saurabh Sharma, joined as CTO
The topic of conversation was centred around one goal: how could web3 disrupt eCommerce?
In eCommerce, the pandemic caused a Cambrian explosion of new shopping experiences. Overnight, almost every retail shopper moved their entire presence online. Companies realized the potential for capturing the new demand of online shoppers and started making more interesting ways for people to shop. Live streaming shopping, affiliate blogs, influencer shops, and more started gaining more traction. Over the course of a year, 60% of previous online shoppers who primarily shopped on large marketplaces like Amazon and Walmart moved to shop on other eCommerce experiences. There was also a watershed moment for Shopify, where merchants realized they didn’t have to be stuck in Amazon’s ecosystem and could now own their own infrastructure stack. Shopify gave them tools for inventory management, order fulfilment, and more interesting customer pricing models.
However, there became a clear disconnect between brands/merchants and the people and companies that sell their products. Merchants were handcuffed to either sell directly on Amazon or to use Facebook and Google ads to generate sales. The overall cost of this customer acquisition has increased by 222% in the last eight years and 41% in the last year alone. On the other side, sellers had to sign up with bloated affiliate networks with limited product inventory to sell products or go through an inefficient process of creating contracts directly with brands.
After weeks of researching the market and talking to brands and sellers, my co-founders and I started to sketch together what the future of eCommerce should look like: an open and free network that could hold the collection of all products — where any brand can plug in their inventory, and any seller could pull from. This network should allow sellers to spin up an eCommerce experience in minutes, similar to how Stripe enabled payments in minutes.
Most importantly, it should also be a utility: no central entity should control the network, and it should evolve with the needs of both the merchants and sellers.
We believe this network will bring dramatic benefits to shoppers, merchants, and, most importantly, developers:
Shoppers will have a unified checkout experience where they can pay for items from different stores in one cart. We will also use web3 tech to allow crypto benefits such as USDC cash-back rewards, NFT drops and coupons, and faster shopping reward systems.
Merchants will be able to list their inventory within our database and have way more efficient tools than what exists today to allow them to: get higher quality customer data, run their store more efficiently, and reward customers and developers directly.
Developers can now set up a website or app and have unlimited access to the largest inventory of products.
My co-founders and I established Rye in order to start deploying the building blocks of this network. We’ve spent the last year building a centralized MVP of this product to showcase the value of how this could work and how it makes eCommerce way more efficient. To start using Rye, sign up here.
The API has three core features:
Programmatic Checkout: First, we have developed a 1-click programmatic checkout that lets shoppers add their payment information right on the shopping experience instead of having to pay on a merchant’s website.
Shopify & Amazon Product Data: Second, our API has the largest inventory of Shopify and Amazon product data. Developers can request an API key and search through our catalog for free, requesting data such as price, inventory counts, product variants, and more. In addition, Rye offers a search and recommendation engine that allows for a much more personalized product discovery experience.
Network Rewards: Finally, we’ve added connections to affiliate networks that allow developers and publishers to accrue rewards for their sales.
We’re thrilled to announce that we have raised $14 million in Seed funding to help us build the next evolution of eCommerce. A16z crypto led the round with support from its Cultural Leadership Fund and participation from Solana Ventures, GOAT Capital, L Catterton, Electric Ant, Electric Feel Ventures, Andre Iguodala, Javale McGee, and James Beshara. We’ll use the money to invest in our product and engineering teams to build out additional tools for sellers and merchants, as well as start decentralizing our infrastructure.
So, what are we building next? Our core API already solves quite a few challenges that eCommerce developers face; however, the upcoming features on our roadmap will make selling products far easier. We’ll build out a unified checkout experience where shoppers can pay for items from different stores all in one cart. We’ll then bring in the web3 components that will eventually be at the heart of the network: email-based wallet creation for shoppers, developers and merchants that will unlock things like USDC cash-back rewards, NFT drops and coupons, and faster shopping reward systems. Finally, we’ll enable merchants to directly connect to the Rye API, which will unlock faster product data and an instant checkout experience.
Eventually, the Rye API will be fully decentralized, built on the Solana blockchain. To achieve this, we need to work with merchants and sellers directly and partner with developers in the community who understand our vision and want to build with us. We’ve started by open-sourcing reference apps (like the Rye store builder) that use the API, which would allow anyone to spin up their own shopping experience in minutes.
Start building with Rye, sign up here.
Also, if you’re interested in working with the core team, we’re hiring across a number of roles. You can apply here.