Bitkraft, Fabric Ventures lead $6.5 million round into web3 loyalty platform

Venture capital firms Bitkraft and Fabric Ventures led a $6.5 million round into Cub3 (pronounced Cube), a customer loyalty platform that aims to automate web3 rewards based on participants' real-world activities. 

CMT Digital, Red Beard Ventures and Geometry Labs among others also participated in the Series A round, said the company. 

Currently supporting the Ethereum and Polygon chains, the Cub3 platform enables brands to create loyalty programs that reward users in tokens for completing certain actions.  These could be tweets about a specific brand or uploading a video of themselves dancing to TikTok. These can be traded for perks such as exclusive content or discounted merchandise. 

"Our clients are anyone who wants to improve the way they engage their users, customers, or fans," said CEO Linc Gasking in a written interview with The Block.

Gasking said that it originally launched in the music space and has so far worked with clients covering artists including Duran Duran, Annika Rose and Roxy Music. Clients in the charity, sports and retail sectors are set to launch campaigns using the Cub3 technology soon, he claimed. 

Proving your loyalty

Much of the funding will be funneled into launching its so-called Proof of Behavior protocol. Currently, in beta, the company says this system uses artificial intelligence and machine learning to identify and evaluate behaviors both real-world and on social media platforms. Behaviours and their subsequent rewards and then stored on-chain so that brands can access analytics to measure their return on investment. 

“From receiving a digital collectible for a retweet to incentivizing fans with unique rewards for streaming artists' new music, Cub3 is creating a Proof-of-Behaviour Protocol including a full-service web3 toolsuite where brands, publishers, agencies and artists can use positive reinforcement to create brand alignment and incentivize user actions," said Bitkraft founding partner Malte Barth in the release. 

Cub3's funding round comes amid recent mixed fortunes for web3 loyalty programs. Brazil's Mercado Libre rolled out a loyalty token in August and coffee conglomerate Starbucks began beta testing its NFT loyalty program at the tail end of last year. Still, neobank Revolut pushed back its native token intended to operate in a similar way to air miles schemes, per reports last month, and Porsche's NFT drop that would allow holders access to events and exclusive merchandise fell short of selling out.