The Building Blocks of Web 3.0
Our Investment in Tenderly
Yesterday, our portfolio company, Tenderly, announced that they’d raised a $15.3m Series A from Accel only a couple of months after our initial seed investment. Given the recent news, we figured it would be a great time to share why we invested and why we believe Tenderly will be a critical piece of infrastructure and enabler for the crypto ecosystem.
Blockchain, and specifically Ethereum development, is difficult and requires developers to invest significant time and effort in order to learn new skills and in order to become productive. Being fast and breaking things is an approach less suitable in a smart contract environment and making sure the code is right is essential, as fixes are more challenging than in traditional Internet. At the same time, the tools which are available for traditional web development (Datadog, Heroku, etc) do not yet exist for Web 3.0. This is the problem that Tenderly is tackling.
Tenderly is building the world’s first end-to-end smart contract developer platform. They support developers every step of the way by giving them full observability of their smart contracts through their monitoring platform, a testing environment, and ready-made components that significantly cut the development time and cost, lowering the barrier to entry for blockchain products.
Our Thesis
A rapidly growing market with the potential to become one of the fundamental pillars of the internet
The blockchain ecosystem is still in its infancy with only about 3.5k total decentralized applications. Our belief, however, is that an increasing portion of the internet today will move away from traditional centralised systems to more decentralised and transparent ones that rely on smart contracts. To date, this shift is being driven largely by decentralized finance (DeFi). The total value locked in Defi applications grew from around $700m in January 2020 to $90bn in March 2021. Moving forward, we expect to see adoption of smart contracts beyond just financial applications to include things such as gaming, data sharing, identity management and more.
Lack of existing infrastructure to support development
Unlike Web 2.0, Web 3.0 still lacks an established tool-set for developers. Reading and analysing transactions on Ethereum and other blockchains is usually done in a manual and time-consuming way. There are no established tools to help developers identify bugs or to give them the visibility and level of detail available to other programming languages. Whilst a few tools have recently launched in this space, the competitive landscape is still in its very early days. Leadership in blockchain DevOps automation and monitoring is still up for grabs and Tenderly has the opportunity to lead it!
Strong initial traction and clear evidence of customer love
Tenderly has exceptionally strong market penetration with almost 50% of active blockchain developers having interacted with them at least once. Their visual debugger is regularly used by thousands of smart contract developers and more than 5 million alerts are sent from the platform monthly. Most of the leading projects in the space such as Aave, Chainlink, Nexus Mutual and Uniswap use Tenderly as a key part of their development workflow.
Just scanning through their Twitter feed, it’s clear that users LOVE Tenderly as much as we do :)
Stellar team with experience building developer tools
We couldn’t be more excited to support and work alongside Andrej, Bogdan, Miljan, Nebojsa and the rest of the Tenderly team. Based out of Serbia, the core team has been building monitoring tools together most recently at ManageWP (sold to GoDaddy). Believe it or not, they bootstrapped the company for the first few years through hackathon prize money. In their first year or so, they won 13 hackathons!
Aside from Tenderly, we’ve also invested in Chainalysis, Kaiko and Bitbond in the crypto space. We’re on the lookout for the next generation of crypto enablers and building blocks, if you know anyone building something in this space, let us know!
