Alchemy, which purports to be the ‘de facto platform’ for developers to build on web3, is now valued at $10.2 billion – Techdoxx

Deepak Gupta February 8, 2022
Updated 2022/02/08 at 2:04 PM

As proof that web3 is not a passing trend, blockchain infrastructure startup Alchemy announced today that it has closed a $200 million Series C1 equity round that values ​​the company at $10.2 billion.

For the unfamiliar, web3 refers to a decentralized web based on blockchain. And to put it simply, Alchemy wants to do for blockchain and web3 what AWS (Amazon Web Services) did for the internet.

What is remarkable about this increase is the speed with which Alchemy was able to increase its rating in a relatively short period of time. In October, the startup was valued at $3.5 billion after a $250 million Series C round. And in late April 2021, the startup was valued at $505 million after a $80 million Series B investment. This means that the startup has seen its value rise almost 3x since October and for a 19.8x since last April – just over nine months ago. To put this further into context, this represents a gain of nearly $1.1 billion in value per month. Not bad for two guys who started the company from their apartment five years ago.

Existing sponsor Lightspeed Venture Partners and new private equity firm Silver Lake co-led Alchemy’s latest investment, which brings the company’s total raised since early 2017 to $545.5 million. Notably, all of the company’s previous investors — which include Andreessen Horowitz (a16z), Coatue Management, DFJ, Pantera, Lee Fixel’s Addition — have also put money into the latest funding.

Alchemy’s goal is to be the starting point for developers considering building a product on top of a blockchain or conventional blockchain applications. Its developer tool aims to remove the complexity and costs of building infrastructure while improving applications through “necessary” developer tools. It launched its offer in August 2020.

Since then, the profitable Alchemy has seen dramatic growth on its platform. Sources familiar with Alchemy’s internal goings-on told Ploonge that the startup has grown its user base by nearly 50% since closing this latest round.

“Basically, the most important companies that explode in cryptocurrencies are powered by Alchemy, so when you invest in Alchemy, you get a broad index of the entire space,” said one such source. “The company basically powers the entire industry.”

Alchemy declined to reveal revenue numbers, but told Ploonge it saw over 3X growth in the number of teams building on their platform since the October surge. It is also proud to have generated $105 billion in annualized on-chain transactions, more than double the $45 billion shared in October. Meanwhile, the startup continues to operate with a “lean and mean” mentality. At the beginning of 2021, Alchemy had 13 employees. It is now just under 50. Its appraisal to headcount ratio is “one of the smallest teams to make an impact in history,” he believes. Nikil Viswanathan, co-founder and CEO of Alchemy.

The company’s impressive growth comes amid a volatile period in the crypto space, which has seen many ups and downs in the past year.

“You know you’re in for something special when your business continues to accelerate even if the market you operate in hits turmoil, and that’s exactly what is happening with Alchemy,” said Amy Wu, partner at Lightspeed. “There are really no past examples of growth like this to compare, but you can see how enduring companies like Microsoft have grown and see where Alchemy has the potential to go.”

It’s safe to say that Alchemy’s growth numbers are evidence of a huge acceleration of growth in the web3 ecosystem as a whole.

Over the past 12 months, NFT marketplaces built on Alchemy have delivered more than $1.5 billion in royalties to artists, with nearly $1 billion in just the past three months, the company said.

Viswanathan said the company has barely touched all the capital it previously raised. But with web3 advancing as fast as it has, the company wants to have the lead it needs to grow accordingly.

“We think we’re just in the first round of web3. It will not replace Web 2, but rather extend new features and experiences from Web 2,” Alchemy CTO and co-founder Joe Lau told Ploonge.

Despite being profitable and experiencing such rapid growth, Alchemy continues to raise hundreds of millions of dollars to basically ensure it can keep up with the rapid and widespread use and growth of web3, say its founders.

“We want to make sure that we are in a good position to basically help companies and startups as they grow,” said Lau.. “In the past year, we’ve seen teams that started at Alchemy teams grow into billion dollar companies and support billions and billions of users around the world. We believe we are just getting started and we want to continue to help and support our customers as they grow.”

While there has been a lot of talk on Twitter debating web3 versus Web2.0, Viswanathan and Lau believe there doesn’t need to be that much tension between the two.

“At the beginning of any technology, everyone is always trying to find out. If you look at the internet in the mid-90s, people were like ‘this is so slow, why would anyone use email?’” Lau said. “But the reality is that the technology improves and we are trying to figure out what it will be like 10 to 15 years from now.”

Viswanathan agrees.

“When you look at the computer, the internet has not replaced the computer,” he said. “It just added features that weren’t possible before. Also, there was a lot of excitement in the dot.com era about the baby internet. Now we have the real internet. And we are still in the baby web3 phase.”

It’s a fact that thousands of new web3 organizations are launching and scaling fast. Meanwhile, hundreds of established Web 2.0 companies are swivel their strategies to include web3 in Alchemy. There are also tens of thousands of developers of new blockchain-powered tools and services.

What we’ve seen is that Alchemy has really become the de facto platform for developers to build on web3,” said Viswanathan. “We’re super excited because we believe that this year, acceleration is transforming web3 from a fringe technology used by hobbyists to everyone using products powered by web3, even if they don’t realize it.”

The startup helped propel several giants, including OpenSea, Adobe, Dapper Labs, and Crypto Punks, among others. He earns money by charging for computing units. In other words, your customers pay Alchemy based on the amount of computing they use.

“We believe that web3 should be accessible to everyone, and the best way to make that happen is to help the incredibly creative developers who are bringing their ideas to life through blockchain technology,” said Lau.

Image credits: Alchemy

Silver Lake co-CEO Egon Durban told Ploonge via email that his company believes web3 “represents a major evolution on the Internet.”

“The market opportunity is enormous, and as one of the fastest growing companies in the history of technology, Alchemy is building the infrastructure to drive and democratize this transformation, helping to bring it to everyone, doing for web3 development what AWS did it over the Internet,” added Durban.

Over the past three months, Alchemy has also led the launch of Web3 Universityan open educational resource for anyone who wants to develop their web3 development skills and has created alchemy venturesto help nascent web3 companies accelerate their growth.” So far, it has allocated $10 million to this “with more to come” venture fund. He did several investments to date, including support for Royal, cryptocurrency exchange FTX (recently valued at $32 billion), Genies, Matter Labs, and Arbitrum. Some, but not all, are also customers.

“2021 was the year developers took web3 mainstream and created businesses that are transforming the lives of millions,” said Viswanathan. “In 2022, we will double our commitment to meet the needs of developers in more places, making it easier than ever to unleash the potential of web3.”

The company plans to use some of its new capital for hiring and expects its headcount to reach around 200 by the end of the year. Until now, it has focused on high-quality hires. For example, 22 of its 27 employees in October were founders themselves, with “several people running several hundred companies”.

Alchemy is just one of several companies lately that have raised money to fuel cryptocurrency companies. In January, cryptocurrency infrastructure company Fireblocks nearly quadrupled its valuation to $8 billion in six months. And last December, Coinbase Ventures supported cross-network infrastructure provider Router Protocol on its $4.1 million round.

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