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DFJ Growth News

Alchemy — “Backing the Chain Gang”

By Randy Glein and Sam Shapiro, DFJ Growth

We’ve been preparing for this moment at DFJ Growth for the past seven years. That’s when we started our journey with cryptocurrency and its underlying technology called blockchain, including our first investment in the category. Since then, we’ve continued to build conviction that blockchains, which at their core are decentralized digital ledgers for tracking all sorts of transactions, will transform the way industries record and manage the ownership of tangible and intangible assets.

Nearly every industry is likely to be impacted by blockchain, including initial early adopters in sectors like financial services, media and entertainment, digital payments, and global commerce.

Despite our growing enthusiasm, there have been certain hurdles preventing broad-based adoption of blockchain. Namely, blockchain technology is notorious for the inherent complexity and effort involved with creating and supporting new chains and the applications needed to bring them to life. So, we’ve been patiently searching for the company best positioned to unleash the power of blockchain and help take it into the mainstream …. and now we’ve found it at Alchemy.

Alchemy is changing the game by abstracting away the complexity of building applications on blockchains and supporting their developer and user ecosystems. Unlike web applications — for which there is a robust suite of infrastructure and tooling — blockchain has lacked sophisticated tools to help developers build, learn, and iterate. Alchemy has created a comprehensive, foundational layer for blockchain development that provides the reliability, scalability, and user experiences demanded by modern applications built on blockchain.

We believe Alchemy is uniquely positioned to power a broad array of innovative applications, providing essential infrastructure that enables the rise of the entire blockchain ecosystem.

The early emerging use cases are already gaining rapid adoption, including decentralized finance (DeFi) and non-fungible tokens (NFTs). DeFi applications aim to democratize access to financial products, where the total value locked in DeFi has grown over 50x over the last year to an estimated $55 billion. NFTs have changed what is possible in the creator economy with verifiable ownership of unique digital assets, where NFT sales grew to more than $2 billion in the first quarter of 2021 from nearly nothing just a year ago. In both cases, Alchemy is enabling the path forward for many of the emerging businesses in these categories, similar to the role played by public cloud providers during the rise of cloud computing over the past decade. Alchemy is providing this type of essential solution for blockchain environments.

In support of the vision being pursued by Alchemy, and our confidence in their exceptionally talented co-founders, Nikil Viswanathan and Joe Lau, we are thrilled to join the Alchemy team with an investment in their Series B financing. Alchemy sits at the nexus of two core investment themes for our team at DFJ Growth, including the Developer Economy and API Economy movements. Accessed via a simple API, Alchemy is well positioned to power companies building the future on blockchain, from crypto-native startups to established businesses.

Since launching publicly less than a year ago, Alchemy has already enabled more than $30 billion in on-chain transactions, serving millions of users across the globe.

The majority of top Ethereum application developers use Alchemy, helping to facilitate the promise of digital smart contracts, as new chains also increasingly see Alchemy as their partner of choice to establish a robust and reliable service layer for their applications and users.

Alchemy Co-Founders Nikil Viswanathan and Joe Lau

We are thrilled to partner with Nikil and Joe as they build the critical tooling and infrastructure that is empowering developers to deliver on the decentralized promise of blockchain. Nikil likes to say that the biggest impact can be made during the transition period of transformational shifts in technology. Blockchain has the potential to be one of those shifts, and Alchemy is positioned to enable the transformation as the operating system layer that brings decentralized applications to the masses. With our title above inspired by Chrissie Hynde and The Pretenders, from the dawn of the PC generation, we are super excited to be backing this chain gang and their vision for a transformational future!

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