Chronicled, Inc. announced recently that it has closed $1,400,000 in convertible note financing. The round was led by investment firm Colbeck, with participation from Mandra Capital, Pantera Capital, Social Starts, and Seattle Seahawks RB Marshawn Lynch, in addition to the Company’s four co-founders and other angel investors. The Company intends to use the funds to continue building its consumer authenticity platform, which it will launch for limited edition sneakers in autumn 2015.
Chronicled eliminates knock-off sneakers from the market by attaching small wearable sensors—Smart Labels—to shoes, using an open registry and various applications to track authenticity, ownership, and provenance. The Company has partnered closely with Identiv (NASDAQ: INVE) in the development of the encrypted microchips included inside of the Smart Labels.
“We are delighted to be joined by investors with deep expertise in social platforms, cryptography, and the burgeoning Internet of Things, as well as pop culture, art, sports, and fashion,” said Ryan Orr, the company’s founder and CEO. “Our technology lets consumers know if their products are authentic at the tap of a mobile phone,” said Sam Radocchia, co-founder and CPO. “It also provides brands and retailers with a new platform to engage with the consumer beyond the point of sale and to issue limited edition products.”
The luxury consumer goods market exceeds $1 trillion in annual transactions by some estimates, with the secondary market for high-end collectible sneakers accounting for upwards of $1 billion of this total. In recent years, counterfeit goods — in some cases, nearly indistinguishable from the genuine items — have become a rapidly growing problem, cheating governments, merchants, and consumers out of hundreds of billions of dollars annually. In response to this growing crisis, Chronicled believes its platform can re-establish trust between consumers and the brands that they love.
“The secondary market for luxury goods and collectibles is flooded with fakes, resulting in illiquidity and daunting consumer risk,” said Dan Morehead, CEO of Pantera Capital. “Chronicled’s technology has the potential to make the market safe and efficient, while giving users a better experience. Luxury goods provenance represents a multi-billion dollar sector where blockchain technology can add unprecedented value.”
The sneaker models with the highest prevalence of fakes include the Air Jordan 1, Air Jordan 3, and Air Jordan 11, as well as the annual Doernbecher special editions and the Nike Air Yeezy. Chronicled plans to launch its platform near the end of 2015 with more than 15,000 pairs of sneakers secured.