Overseas giant VCs rushed to vote for Web 3.0, and Musk did not miss it?

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THECAPITAL

The outlet is opening up and institutions are pouring in.

This article totals 2858 words and is about 4 minutes

Author | Ma Jinzhi Edited by | My people

Source | Rongzhong Finance

（ID：thecapital）

Web 3.0 ignited the investment enthusiasm of VCs.

Web 3.0 refers to a decentralized online ecosystem based on blockchain technology, which many believe represents the next phase of the internet and one of the biggest technology trends of 2022, attracting a great deal of attention from the capital markets. Cryptopolitan data shows that in the first quarter of 2022, Web3.0 startups have received more than $173 million in investment. The investment for the full year of 2020 was only $20 million.

The outlet is opening up and institutions are pouring in.

From January to April 2022 alone, Sequoia Capital invested in a total of 17 Web3 companies at a weekly investment rate. Coinbase Ventures invested in 71 companies in the first quarter of 2022 alone.

That said, the industry has a different view of Web 3.0. Tesla CEO Musk has said that Web 3.0 is like a nonsense, which has made Web 3.0 more hyped. In any case, many VCs with a steady stream of capital invested in Web 3.0, involved in the future of the Internet changes.

01

Sequoia, a16z bet

Overseas VCs rush to web 3.0

Top VCs are always the first to see the future trend of new technologies, do not hesitate to tangle, and miss investment opportunities.

Led by top venture capital Sequoia Capital and a16z, it can be said that it dominates the entire Web3.0 investment market.

Sequoia Capital is quite open in investing in Web3.0 projects, both in terms of funds and stature. Sequoia Capital has broken the traditional ten-year investment model and established a permanent open structure around the "Sequoia Fund". This means that for projects like Web 3.0 or more than a decade to make money, Sequoia Capital can keep investing.

Previously, Sequoia Capital launched a $600 million scale fund that plans to focus on investing in startups related to Web 3.0 technology. So far this year, Sequoia Capital has led a $12 million seed round funding round for EthSign, a Web 3.0 electronic protocol platform, and participated in a $32 million funding round for Espresso Systems, a Web 3.0 privacy system.

In 2021, Sequoia Capital leads blockchain company Polygon for $450 million. That same year, Sequoia India invested in Web3.0 startups such as Betafinance and Clearpool.

It's worth noting that Twitter is the source of most of Sequoia Capital's Web 3.0 projects. Sequoia Capital investor Michelle Bailhe followed a number of Web3.0 entrepreneurs on Twitter, including paradigm, Coinbase, OpenSea and other star project founders, who also received investment from Sequoia Capital competitor a16z.

Another agency, A16z, which has a total of $19.2 billion in management, has launched three phases of funds in Web3.0 for a total of $3 billion. A $4.5 billion new fund is currently being planned, of which $1 billion will go to a16z's seed investment in the Web3.0 space. The investment directions of these funds are: encrypted payment methods, encrypted store of value, DeFi (decentralized finance) and so on.

Previously, a16z invested in cryptocurrency exchange Coinbase for 9 rounds, becoming its most successful investment in Web 3.0. In 2021, Coinbase landed on the NASDAQ, and its market capitalization was as high as $112 billion. A16z, Coinbase's second-largest shareholder, cashed out about $4.375 billion worth of shares and still holds a 7 percent stake in the company.

In 2022, a16z led Alta's $12.4 million funding, Yuga Labs' $450 million financing, Everyrealm's $60 million financing, and Lido's $70 million financing, which focused on the Meta-Universe Track, the NFT Track, and the DAO.

In addition, the 43 Web3.0-related companies invested by a16z in 2021 have completed IPOs or mergers and acquisitions.

A16z founder Mark Anderson has written that a16z's fund can "write checks as small as $25,000 and as large as hundreds of millions of dollars." So you can invest in the small Web 3.0 projects as an angel investor in advance. At the time of leading Coinbase, a16z cost only $1.

In the Web3.0 space, there are also many dollar VCs that choose to bet, such as Griffin Gaming Partners, a gaming-focused venture capital firm, and Bain Capital, one of the world's largest venture capital firms, which have set up funds worth $750 million and $560 million respectively to support Web3.0 builders. Haun Ventures, a venture capital firm led by former A16z partner Katie Haun, raised a $1.5 billion Web3.0 venture capital fund to invest in every layer of the Web3.0 technology stack. Accel Partners, a well-known venture capital firm in Silicon Valley, led a $52.5 million investment in Code 42, a U.S. backup software vendor, from its Web 3.0 big data construction fund

In terms of domestic capital, Tencent participated in the $200 million financing of Web 3.0 NFT game company Immutable. Ali and Tencent have made localization of whale probe and magic nuclear NFT products with reference to foreign NFT products to promote the sinicization of Web 3.0.

Compared with overseas Web3.0 investment, there are not many domestic investment projects, and the attitude of VC investment is somewhat conservative, but everyone looks at the blue ocean of Web3.0 and actively lays out.

02

Musk and VCs staged a "tongue war" drama

Just like when the meta-universe concept came out, the technology industry giants staged a "war of words", and as soon as the Web 3.0 concept came out, the same plot came to the front of the stage again, this time it was Musk's "tongue war" with the top VCs.

Musk once said bluntly on Twitter: "Did anyone see Web 3.0?" I can't find it. "I don't think Web 3.0 will come true — it's more of a marketing term than an actual thing." Jack Dorsey, a former Twitter CEO with whom he joined, said, "Web 3.0 is not yours. "Web 3.0 belongs to venture capital and limited partnerships (LPs), between a and z (alluding to a16z, a venture capital firm that is crazy to mine money in Web 3.0), and there is never any way to escape the control of these people.

The opposite view comes from the A16Z founder Marc Andreessen and the CEO brain Armstrong of the upstart Coinbase, who argue that Web 3.0 is an evolutionary form of the next generation of the Internet, closely related to the concept of metaverse, cryptocurrencies, etc., and it offers the possibility of something better, involving investors through global financing.

In fact, Musk did not completely repudiate Web 3.0, and even had a tendency to promote the transformation of Twitter Web 3.0. Looking at Musk's tweet, he once launched a poll: Do you think Twitter adheres to the principle of "FreeSpeech"? At the same time, Musk pointed out that Twitter's algorithm should be open sourced to get Jack Dorsey retweet support. That month, Musk also posted, "Do you need a new platform?" "There's a lot of discussion about whether Musk will rebuild a new platform. The news of his acquisition of Twitter verified Musk's desire to transform Twitter. Musk has also expressed his hope for the day web 3.0 arrives, to see what the world will become. Or be the trader yourself, so when someone says, "The best way to predict the future is to start building," Musk replied, "Yes." ”

Musk is a heavy user of Twitter and a representative of the company that uses Twitter to govern, and Twitter is one of the most visited websites in the world, playing an important role in the communication industry, and its user voice dispute also makes it the most typical Web 3.0 public product. Whether Musk is willing to push for such a change is very worth paying attention to.

In musk himself, one of the reasons he bought Twitter was to make sure his tweets weren't censored. Musk's dissatisfaction with the existing Twitter and his desire to establish a more equal online order are consistent with the web environment that Web 3.0 wants to achieve. As a tech mogul, Musk has completed a lot of crazy-sounding plans, so it seems that It is not impossible for Musk to move from Twitter to Web 3.0.

In contrast, domestic VCs are optimistic about the development of Web 3.0. A VC who invested in the metaverse said he was optimistic about the development of the metacosm, which will be a path for the next generation of the Internet. The metacosm belongs to what the next generation of networks might form, but is not the only path. The metaverse that masters Web 3.0 technology will be an immersive, somatosensory, interactive network information structure. In addition, under the open and connected Web 3.0 Internet, the advertising traffic model will be replaced by a reward mechanism, and through blockchain technology, excellent people and people who do good will receive more rewards.

03

Web 3.0 investment opportunities and risks coexist

Web3.0 is currently in a very early stage of exploration, a large number of projects are mixed, very few real successes, the vast majority of them have become victims of innovation trial and error, for investment institutions, investment risk is very large.

This risk includes immature technologies, such as the dilemma of technological decentralization.

Taking the Core Technology of Web3.0 Blockchain as an example, it should be able to create a decentralized environment, but if there are not many blockchain users, it is difficult to find transaction objects when trading online. At this time, it is necessary to introduce an exchange, complete the transaction matching through a large number of character maps, and then trade. As a result, trading has returned to centralization, and exchanges have the power of traditional network platforms.

The Russo-Ukrainian War is a stark example of a centralized exchange that abruptly closed the accounts of Russian traders. This shows that the exchange knows the user information very well and has the ability to dispose of it easily.

At the same time, there is a lack of supervision that gives scammers an opportunity.

Taking the "chain circle" hero Sun Yuchen as an example, during his tenure at Tron, he was suspected of organizing insider trading, dodging ICO bans and other issues, and should be investigated by the FBI. But he personally disagrees, saying that he is Grenada's ambassador to the WTO, enjoys diplomatic immunity, the FBI has no authority to investigate, and the "Tron" where he once served has completed the DAO restructuring and can be exempt from the jurisdiction of the FBI or U.S. regulators.

If users use the DAO to launder money, manipulate the stock market, or have any problems, under the Conditions of Web 3.0, everyone is equal, everyone is not regulated, and they will not be able to find the person responsible, thus causing social chaos.

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