Redpoint Ventures
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Redpoint Ventures

Building Web3: Our Investment in Alchemy

By: Jason Warner, Sai Senthilkumar, and Lydia Hylton

Today, we are at the dawn of a paradigm shift in computing with the emergence of Web3. It’s all around us — cryptocurrencies, DeFi, NFTs, DAOs, etc. The list goes on, and the hype is very real. Ethereum has a market cap near $500B, Coinbase IPO’d at $100B+, NFT-based game Axie Infinity is targeting $1B in revenue this year, and OpenSea is closing in on eBay’s transaction volume. Blockchain technology solves the critical issue that plagues the Web2 world, which is that all value accrues to one party. Web3 empowers participants to capture the value that they create, which incentivizes them to work towards a common goal. As Packy McCormick of Not Boring puts it, “Web3 is the internet owned by the builders and users, orchestrated with tokens.”

We are witnessing history as companies like OpenSea and Dapper Labs hit escape velocity and become mainstream. But to scale a company like OpenSea requires complicated infrastructure tooling. OpenSea and Dapper Labs are fundamentally different from Web2 companies like Facebook and Google in that they cannot run on a standard MySQL or raw AWS. Web3 applications run on millions of nodes that all participate and validate transactions in a blockchain network. Web3 developers need highly available APIs and developer tools that provide quick, reliable access to major blockchain networks like Ethereum.

There needs to be a turnkey ‘AWS for blockchain’ readily available to companies like OpenSea and Dapper Labs that abstract away major infrastructure overhead so that developers can focus on building and scaling applications. However, Web2 infrastructure and DIY solutions have left Web3 developers scrambling for a robust, all-inclusive solution.

Enter Alchemy

Alchemy is the core infrastructure layer for Web3. Its mission is straightforward: to bring Web2 developer tooling to Web3 and make blockchain development easy. Alchemy’s core product, Supernode, is an Ethereum API that delivers accurate blockchain data with unprecedented speed and accuracy. The Alchemy team brought database-first principles to the node management problem, creating Supernode as the Web3 equivalent of highly scalable distributed servers (i.e. AWS).

Supernode is a brilliant wedge to layer on additional products that increases Alchemy’s lock-in with blockchain developers. Alchemy Build, Monitor, Notify and the enhanced APIs are modules that provide the whole gamut when it comes to developer tooling. Alchemy is truly building a platform in this sense. Throughout our diligence, Alchemy was compared to “Windows OS in the 1990s” or “AWS in the 2000s.” They are laying the foundation for a new era of the internet.

In the past year, Alchemy has quickly grown mindshare and is the leading node service provider for blockchain applications, powering billions in transactions for tens of millions of users all over the world. The growth in number of developers and velocity of application development on the Alchemy platform is astonishing and reminded us of past Redpoint investments like Stripe and Twilio in their early days. The adoption of Alchemy over the past 12 months has been nothing short of amazing; every major blockchain application including OpenSea, Dapper Labs, Axie Infinity, SuperRare, Aave, etc. build on top of Alchemy. Alchemy’s growth is faster than tier I infrastructure providers like Snowflake and Datadog when these companies started to scale, becoming one of the fastest-growing software businesses we’ve seen in the past 20+ years.

Our Partnership

We’re thrilled to share that we’re investing in Alchemy’s Series C and joining in this exciting journey alongside Nikil, Joe, and the entire Alchemy team as they build the future of Web3. We are also excited to join Andreesen Horowitz and Lightspeed on this journey.

At Redpoint, we love working with founders, entrepreneurs, and teams that can connect the dots across their unique backgrounds to imagine something bold and new. Nikil and Joe first met as computer science undergraduates at Stanford 10+ years ago, TA’ing the notoriously difficult database class. They teamed up to build the wildly popular consumer app Down to Lunch, and they bring a wealth of knowledge from past experiences. They understand what it takes to build world-class products that delight customers.

At Redpoint we have been fortunate to partner with category-defining infrastructure businesses like Stripe, Twilio, Snowflake, HashiCorp, and Heroku in the Web2 world, and believe Alchemy is well on its way in creating an enduring infrastructure brand within Web3. We couldn’t be more excited!

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Redpoint Ventures

Redpoint Ventures

Redpoint partners with visionary founders to create new markets or redefine existing ones at the seed, early and growth stages.