Alchemy, a builder of Web3 infrastructure used to create decentralized applications, launched a venture-capital arm at the end of 2021, which was a record-setting year for crypto investments. The main company was valued at $10 billion during a $200 million fundraising round in early 2022. The bear market has since crept in, however, and all but stalled investments, and yet Alchemy continues to back early-stage investors.
Alchemy Ventures invests off the main company’s balance sheet and every dollar put out has to tie back to the top-level goals for the Alchemy ecosystem, Alchemy Ventures head Paul Almasi told CoinDesk in an interview.
The venture arm isn’t as return-focused as a traditional venture-capital fund. While returns are still important, the firm has three other primary goals: attracting early-stage founders to the Alchemy ecosystem, gathering strategic intelligence to make better decisions and hiring more people through acquihires or full acquisitions.
“It’s very important for us that we want to align ourselves with Web3 missionaries, not mercenaries,” Almasi said.
Alchemy Ventures invests across blockchains and use cases, but its areas of particular interest include end-user applications and infrastructure or developer tools that help drive end-user adoption.
“We felt strongly that the ideas and products that are going to define Web3 for the next 20 years are going to be built in the next two to three years. So we have to do everything in our power to help make that happen,” Almasi explained. “And for us being an infrastructure platform, we strongly believe that those ideas are going to be brought to life by developers.”
Alchemy Ventures invests an average of $150,000 to $250,000 per company, and about three-quarters of the investments are in pre-seed or seed-stage rounds. The firm offers operational support, including early product feedback, customer introductions to help validate the product’s market fit and recruiting, Almasi said. Alchemy Ventures is also preparing to launch Alchemy Connect in the coming weeks, a full-service platform and social network of sorts for founders.
Alchemy Ventures has made 84 investments to date across two portfolio tracks. The first track is it core business of paying cash for equity. The other track is its accelerator program under which Alchemy offers credits from itself and from third parties like Amazon Web Services in exchange for equity. Forty-six of the firm’s portfolio companies have gone through the accelerator side.
“Right now, founders need a lot of help, so this accelerator portfolio is really a white-glove, immersive program that removes the biggest costs that come with finding product market fit in Web3 – outside of human costs – which are infrastructure costs,” Almasi said.
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