Alchemy co-founders Nikil Viswanathan (left) and Joe Lau.
Alchemy, a startup subtly fueling the recent NFT boom, is raising another round of capital to keep up with the fast-growing industry.
The San Francisco-based company announced Wednesday a $ 80 million Series B funding round led by Coatue and Addition. The new cash injection brings Alchemy’s valuation to around $ 500 million. The round also included the Glazer family, who own the Tampa Bay Buccaneers; the band The Chainsmokers; and DFJ Growth – an investor in Stripe, SpaceX, and Coinbase.
Alchemy is benefiting from the recent boom in digital collectibles from the companies it helps power it. It’s not a blockchain. Alchemy is more of a middleman sitting between blockchain infrastructure and apps like NBA TopShot that consumers interact with.
This build platform was used to create Dapper Labs that resulted in CryptoKitties, the popular NBA Top Shot platform, the largest NFT marketplace OpenSea, and others. The record breaking $ 69 million non-fungible token sold by digital artist Beeple, for example, was operated by Alchemy.
Start of ‘Crypto Winter’
The start-up was founded four years ago at the height of the last crypto boom by Stanford classmates Nikil Viswanathan and Joe Lau. By the end of the year, the price of Bitcoin had risen to nearly $ 20,000. In the following months, however, the value fell by more than three quarters.
Despite a “crypto winter” that followed, the founders said they were still “all-in” with the technology that powers Bitcoin and hundreds of other new cryptocurrencies. Another sign, the co-founders said, were the “smartest entrepreneurs they knew” starting businesses in the blockchain space.
“When cryptocurrencies took off, we saw it and said, ‘This is the next big technological shift,'” said Vischemathan, CEO of Alchemy, in a Zoom interview. “The big problem was that developers didn’t have any infrastructure or tools. We really wanted to make it easy for them to realize this potential.”
Viswanathan and Lau, who previously co-founded the consumer app Down to Lunch, hope to be compared to Amazon Web Services for blockchain. Like Amazon’s Monster Profit engine, Alchemy sits between the internet and companies like Netflix and Uber that use it to host their websites.
The company has existed for four years but was only unveiled to the public last August. With an angel investment from Charles Schwab (the founder, not the company) as well as former Yahoo CEO Jerry Yang, Linkedin founder Reid Hoffman and Jay-Z, the company has already attracted a star-studded capital table. Former New York Stock Exchange CEO, Coinbase, and PayPal founder Peter Thiel are also investors alongside Alphabet Chairman John Hennessy.
“Developer platforms are critical to the adoption of new technology,” said Hennessy, former Stanford University president who mentored Google founders Larry Page and Sergey Brin. “Alchemy is uniquely positioned to significantly accelerate the growth of the blockchain industry, just as Amazon Web Services did for the Internet.”
In the past eight months, Alchemy has seen 97x growth on its platform. The number of businesses it operates doubled in the first quarter, and Alchemy said it had more than $ 30 billion in transactions. NFT sales rose to over $ 2 billion in the first quarter, according to NonFungible.com.
Non-fungible tokens are a type of digital asset that is growing in popularity this year as celebrities and professional athletes flock to the room. NFTs represent ownership of a virtual item, e.g. B. a digital work of art and sports trading cards.
While NFTs were the top growth driver for the startup this year, Alchemy’s CEO said they are getting more calls from financial institutions. There are critics who see the boom in digital collectibles as just another phase of crypto – similar to the first coin offers in 2017.
But Viswanathan said alchemy was agnostic. It doesn’t matter if and which of the platforms is successful, he said.
“We’re not dependent on a single industry – whether it’s NFTs or decentralized finance – we’re growing in many other areas,” said Viswanathan. “You will see a whole new way of lending, borrowing, investing and transferring money – it’s hard to predict exactly what it will look like, but it will be amazing.”
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Correction: This story has been updated to take into account that former New York Stock Exchange CEO and PayPal co-founder Peter Thiel are investors in Alchemy.