With the popularity of the metaverse concept last year, Web3 has also become the hottest new term this year.
Entrepreneurs from the top VCs to the cryptocurrency circle are all talking about Web3. What is Web3? With world wide web inventor Tim. Berners. Li proposed in 1998 that the concept of "semantic web" and "global brain" of Web3 is different, and the popular Web3 now has more meanings that represent the next era of the Internet. Among them, this concept has attracted much attention in the field of blockchain and cryptocurrency.
It has to be said that the distributed storage, decentralized concept, asymmetric encryption technology represented by the blockchain are all in line with the concept of Web3. Therefore, it has become one of the most promising areas for specific landing in Web3 scenarios. The popularity of NFT is also one of the hallmarks of the development of Web3.
Investors who have the sharpest sense of smell have long been aware.
Internationally renowned venture capital institutions such as Sequoia Capital and Goldman Sachs have long begun to lay out heavy funds. Web3 has become the hottest concept in the current VC circle, and huge financing has been born continuously.
"The industry has been paying attention to Web3 for a long time, but the heat has not risen. However, we have only focused on this track since the end of last year. A dollar fund investor admitted to Connect Insight, "The Web3 era will definitely come, although it is still very young, but the development trend is irreversible." It's just that there is still a long way to go to achieve this goal. ”
The far from achieved goal does not stop the outside world from discussing it. The Baidu index shows that as early as 2011, there was a discussion of Web3, but it was not until the beginning of this year that there was a big explosion of search volume, and the popularity has remained high since then.
Web3 ignited the investment enthusiasm of VCs and also entered the eyes of entrepreneurs.
Many companies and entrepreneurs have joined this hot track, even geeks who have never known about Web3 before.
The explosion of the Web3 concept is a disguised reflection of the magic of the technology industry. In the eyes of many Web3 supporters, a new Internet era is slowly opening in the struggle of capital.
1. Well-known VCs flock to Web3
"How do you make sure the Web3 revolution happens in the United States?"
This is the scene that took place on December 8, 2021, at a hearing on the cryptocurrency industry held in the U.S. Congress. At the convention, Republican Rep. Patrick McHenry raised the encouraging question.
Just like when the concept of the meta-universe came out, the technology and capital giants staged a "war of words" and then triggered a sensational debate in the field of capital. After the content of the hearing flowed out, the same plot came to the front of the stage again.
Twitter founder Jack Dorsey publicly accused Web3 of being controlled by venture capital firms on Twitter, and pointed the finger at the famous venture capital firm A16z, one of the leaders in the Web3 space, founder of Mark Anderson.
Subsequently, Tesla chairman Elon Musk also joined Jack Dorsey's team, bluntly saying, "I don't think Web3 is real — now it looks more like a marketing slogan than a reality." "Even publicly mocked" Has anyone seen Web3? I didn't find it. ”
It is interesting to note that two of the protagonists in this debate, Mark Anderson and Jack Dorsey, are two of the exponents of the Web 1.0 and Web 2.0 eras. The Netscape browser founded by the former before, so that Microsoft, which is engaged in vicious competition in the market in order to suppress it, is seriously injured by anti-monopoly; The latter created Twitter to give "more people their voices."
Now the two are tit-for-tat again, pointing to one thing: more and more venture capital is pouring into Web3. Among them, A16Z may be called the investment myth in the Web3 field.
Founded in 2009, a16z has not been established for a long time, but the investment process has run through the entire mobile Internet era. It has invested in Facebook, Twitter, Instagram, Github and many other star companies, making a lot of money. And as early as ten years ago, it has begun to lay out in the Web3 field.
In 2013, a16z bought shares in Coinbase, the largest cryptocurrency exchange in the United States, at a price of $1 per share, and subsequently participated in Coinbase's subsequent 8 rounds of financing.
It was also after starting its investment in Coinbase that a16z's bets on the Web3 space became more aggressive.
Following the raising of its first crypto fund in 2018, a16z has launched four crypto funds. In addition, it recently established a new $600 million game fund focused on the Web3.0/blockchain field", "GAMES FUND ONE", further expanding its investment in the Web 3.0 field.
These funds, which are worth more than $7 billion, have been involved in more than 70 other projects besides Coinbase. Among them, it includes openSea, the world's largest NFT trading platform with high popularity, and Mirror, a decentralized content publishing platform.
It can be said that a16z's raw layout in Web3 is almost beyond all traditional VCs. One Google executive couldn't resist summing up a16z's style with "they're like a lunatic, domineeringly sticking a foot in every transaction."
Capital is using a keen sense of smell to find a lever to pry the old world. But other venture capital giants are half a beat slower than the A16Z, such as Sequoia Capital.
Earlier, Sequoia Capital's interest in cryptocurrency/Web3 remained relatively silent, perhaps because it has been well-placed in the Internet field in the past few years. But at present, the acceleration of innovation in the field of traditional Internet is gradually decreasing. As a result, as the outside world can see, Sequoia has recently opened a large wave of intensive investment in the Web3 field.
Although not as good as a16z, from January to April 2022 alone, Sequoia Capital frantically invested in 17 Web3 companies at an investment rate of almost one per week.
One notable example is that when investing in Web3 infrastructure companies and EthSign, an electronic agreement signing platform, sequoia VC's three divisions – Sequoia Capital, Sequoia Capital India and Sequoia Capital China – all backed the round. This is the first time all three divisions of Sequoia Capital have participated in one financing at the same time.
There are also a lot of dollar VCs that choose to bet. Crunchbase, a foreign research firm, reported that in 2021, 152 venture capital firms have invested in Web3.0 unicorns. Among them, Coinbase Ventures (19 transactions), Digital Currency Group (14 transactions), Andreessen Horowitz (12 transactions), Ribbit Capital and Pantera Capital (9 each), ranked in the top five.
In addition to the top VCs, small and medium-sized VC institutions are also close behind.
"A lot of my peers who follow up on the TMT field have turned to the Web3 field." A VC institutional investor lamented about Connect Insight. After the meta-universe exploded last year, he began to contact related concept companies frequently, "at that time, I wanted to find a good target, but in the end it was fruitless, so I temporarily slowed down the research progress." ”
The core elements of the metaverse, "digital identity" and "economic system", are closely related to Web3.0, and for Web3, the above investors believe that the distance is really coming, and it also needs a long way to go. But it doesn't matter what the outside world says about Web3, and it's not a bad thing if the Concept of Web3 can spur more companies to innovate.
Although it is too early to predict the investment trend in a year or two, the capital forces as industrial outposts are racing against the clock to lay out. The "Web 3.0 war" between VCs is getting hotter and hotter.
2, a new wave of entrepreneurship is coming
"Just resigned, ready to start All in Web 3.0, do you have any suggestions?"
A product manager who has just resigned from an Internet factory has just completed his resignation procedures and is immediately excited to share his joy of entering a new field on social media. This is not an isolated case.
"In the Web3 space, I'm proud to be involved in these epochal work content." Another middle-level employee who has worked in a large Internet factory for more than a decade lamented about Connect Insight.
Housing subsidies, car subsidies, meal subsidies and welfare benefits with different tricks cannot resist more and more employees of Internet factories leaving the Internet and running to Web3. Even Wang Huiwen, co-founder of Meituan, changed his instant (social app) signature to "Learning Crypto.".
The domestic talent market is still like this, and foreign countries are even more vigorous. Products, technologies, platform companies, etc. that have sprung up under the Web3 concept are also targeting these talents. More importantly, the increasingly hot investment fever has further fueled this wave.
An obvious variable is that, for example, when the mobile Internet rose, there was a wave of entrepreneurship and the birth of many unicorns. Today, a new entrepreneurial cycle has begun.
Some entrepreneurs with a keen sense of smell have found business opportunities. "We are working with a leading brokerage company in China to develop the NFT-Web3 project." A community e-commerce co-founder explained to Connect Insight, "When the time comes, it will be sold on Taobao in the form of a blind box." The price is not high, dozens of dollars a piece. ”
The most successful similar case is that Jay Chou's trend brand PHANTACi has cooperated with the NFT distribution platform Ezek to release the first NFT project Phanta Bear, which was sold out on January 1.
Compared with the "small fights" of personal studios, several major star companies have been at the forefront of the trend.
Every coin enthusiast should have heard of the "Coinbase effect." That is, once a token is launched on Coinbase, there will be a surprising increase in the secondary market, which is enough to explain Coinbase's influence in the industry.
As one of the world's largest cryptocurrency exchanges, Coinbase's model is somewhat similar to that of a traditional financial services company: making money through the role of a broker and exchange, and also acting as a part of the "bank."
From a PPT drafted in a small apartment in San Francisco in 2012 to its listing on the NASDAQ in 2021, the company, which was founded for ten years, has soared above $110 billion in market value as soon as it was listed.
Today, it is not only the "place of faith" for cryptocurrency advocates, but also the "popular fried chicken" that attracts the employees of established factories the most. Its workforce has nearly tripled in nearly a year, and it now has nearly 4,000. This year, the Product, Engineering and Design department will continue to employ more than 2,000 people.
Compared with Coinbase, the public knows more about NFTs. With the NFT project in full swing, OpenSea, which has only been in existence for 4 years, has become a global household name for NFT trading platforms, controlling at least 95% of transactions in the NFT market.
OpenSea's model is very much like Taobao – everyone can open a store, everyone can list their own NFTs, so more and more celebrities, brands and companies are listing their NFTs. Yu Wenle auctioned "zombie avatars" in OpenSea, making a hundred million in just two minutes, directly blowing the NFT wind out of the circle.
The hottest NFT at the moment is undoubtedly the Boring Ape Yacht Club (BAYC), and the heavy news of the NFT industry is related to the Boring Ape. Even a16z replaced the profile picture of the official Twitter with the Boring Ape NFT.
Many brands also look at the marketing and communication value of boring apes, such as China's Li Ning, Adidas and other first-line sports brands have cooperated with them.
The parent company that created this famous "boring ape" IP is Yuga Labs, which has been trading at OpenSea.
In March this year, Yuga Labs obtained the intellectual property rights of The CryptoPunks and Meebits two major NFT projects from Larva Labs, and completed the integration of the three largest IPs in the NFT market.
Yuga Labs' ambitions are not just NFTs, but more to build a Universe( and BAYC is at the center of that universe, where Yuga Labs can become a Web3 lifestyle company.
Just when the investment circle and entrepreneurs are still enthusiastically discussing the topic of Web3, in China, because the well-known investor Zhu Xiaohu bought a pair of virtual shoes on his platform, stepN, which became famous in China, suddenly came out of the circle.
On May 27, StepN officials suddenly announced that they would check Chinese mainland accounts and even encourage Chinese users to dispose of their own assets in the game. This means that mainland users can no longer participate in this "Move to earn" Web3 game.
Known as the "hottest application of Web 3.0", StepN is a sports platform established in Australia last October, which can "earn dollars" by "running", so it is called "walking printing machine". Even for this reason, the "running on behalf of" service has been derived.
The running money model makes it a new star in the Web3 world. Since the launch of the platform, StepN's growth has surprised many people. At present, it has more than 3 million monthly active users around the world, with tens of thousands of new users joining every day. Some people even compare it to Keep when they run laps.
However, compared with the Great Migration of the Internet in the United States, the country is still relatively quiet. At present, there are very few Web 3.0 projects that domestic VCs can look at. A dollar fund investor told Connect Insight, "There are almost no good targets in China at present, and we mainly focus on overseas companies." ”
No matter which era, as long as there are new changes in technology, there is a possibility of new giants, not to mention that Web3 has just begun.
3, the giants are also studying Web3
The real Web3 era is far from here, but the giants have already met again at this table.
Web3 may be a false, Chinese Web2 is now left with a real disappointment — this is the attitude of Zhang Xiaolong, tencent vice president and WeChat founder, to Web3 at the 2021 Tencent Employee Conference six months ago.
However, only three months after the speech, Tencent's attitude has undergone a 180-degree reversal, and Tencent has appeared in the Web3 field.
Perhaps considering that the game business is Tencent's main "cash cow", the entry point of Tencent's layout in Web3 is also the game field, through foreign investment.
In March, Tencent and Singapore's Temasek led the investment and other capital institutions to complete a new round of financing for Australian NFT game company Immutable. This is a game company with Web 3.0 technology.
This is Tencent's first investment in the Web3 space. As a domestic Internet giant, the change in Tencent's investment wind direction also represents the change of the outlet. In an interview with 36Kr, a Tencent employee revealed that Tencent has almost no investment in domestic ToC startup projects, and Web3 may bring new possibilities to it.
Tencent's relationship with Immutable has actually been quite long. As early as September 2019, Immutable's $15 million Series A financing was led by Naspers Ventures, an investment company owned by Tencent's largest shareholder, Naspers.
Compared with Tencent's investment actions, byteDance's layout is not obvious.
Tik Tok, as byteDance's global weapon, must use it as the gripper of Web3. Last October, Tik Tok unveiled its first NFT title, TikTok Top Moments, six "culturally significant TikTok videos." The work was done in collaboration with six of the platform's most popular creators, as well as several well-known NFT artists.
It is not difficult to find that byte and Tencent's layout for Web3 are based on the original business, and they are concentrated in overseas markets, Ali chose a new path to try to sinicize Web3.
In July last year, Alibaba's Hong Kong newspaper, the South China Morning Post, launched an NFT platform program called "ARTIFACT", which can NFT facts or real historical assets, and the resulting NFT works can be distributed through its own NFT platform "ARTIFACT".
In addition, Ali also referred to foreign NFT products and launched the Whale Detective NFT distribution platform with the help of "Ant Chain".
Emerging strong enemies are around, and old Web 2.0 giants such as Twitter and Google have to go down. Compared with these overseas giants, the three major Internet giants of Ali, Tencent and Byte can only be regarded as cautious testing.
Twitter is even more ahead of its way to Web3. Not only did it give the Web 3 startup corps the opportunity to communicate online, but it was also the first to launch an NFT product released by the Internet giant, allowing Twitter's user avatar to appear as an NFT. And the user avatar with NFT appears as a hexagon, which is also considered by the industry to be the first attempt by the Internet giant to transform to Web3.
Soon after, Google and other social platforms announced that they would join the research and development of Web3 products.
In May 2022, Google Cloud set up its first Web3 team in that month. Professor Lory Kehoe of Trinity University Dublin understands this that the Web3 project is a priority by Google.
Part of Google's enthusiasm and determination for Web3 may come from the excessive loss of Google talent to Web3 companies.
How to retain employees and prevent them from flowing to crypto companies has become a frequent topic of discussion between CEO Sundar Pichai and his deputies.
In addition, the demand of the market has also stimulated Google to extend a hand to the Web3 field. "Many customers have asked us to increase support for Web3 and crypto-related technologies," Amit Zavery, Google's vice president of cloud, explained in an internal email sent after the new division was formed.
Indeed, there is a demand for cloud services in the Web3 space, such as the storage of data and assets. As a result, Google is trying to incorporate the new realm of Web3 into its business landscape.
It cannot be denied that the current signal that Web3.0 is coming from the outside world may have a certain degree of bubble. But the convergence of Internet companies with Web3 has become an irreversible development trend, even changing people's online lifestyles in subtle ways.
The influx of participants are betting on a better tomorrow, and they are not afraid of bubbles now, but afraid of their slow entry.