We are extremely excited to announce our co-lead investment in SubQuery’s $9m funding round, along with Arrington XRP Capital and Digital Currency Group. We believe blockchain will continue the process of software eating the world. From decentralized finance, identity to the metaverse — blockchain technology enables a sleuth of applications previously unfathomable. SubQuery is a foundational protocol building the infrastructure of Web3.
While it is difficult to know exactly how Web 3 will evolve, one lesson garnered from Web 2 is relevant — data is at the heart of everything. Facebook is a data company. Amazon is a data company. Google is a data company. Data is the core resource that drives the internet. It is now impossible to imagine the internet without a search engine. Google became such an integral building block for Web 2 that it is now a verb. So who will be the Google of the decentralized world?
SubQuery is vying for that title. Blockchains produce massive amounts of data that are not easily searchable. The data in these databases can be anything from financial transactions to digital stick figures. In the same way that Google indexes websites to make them easily searchable, SubQuery indexes blockchain data making it easy to query.
This is a critical service for blockchain projects and applications. Without it, projects would need to devote tremendous resources to build data backends from scratch. SubQuery provides developers the tools to alleviate this headache.
“It’s easy to make the comparison between SubQuery and Google — they both provide irreplaceable tools, have tremendous network effects, and have or will create incredible value for their owners. Where they differ is in SubQuery’s open source architecture, that lets the community benefit from the economic value created by it, and to collectively govern its use of that data for the best outcomes for its users. SubQuery is a prototypical example of how Web 3 principals take what works from Web 2 and makes it transparent, fair, and community driven.”
~ Rennick Palley, Chief Investment Officer, Stratos Technologies
Why We Invested
In analyzing this investment opportunity, we identified the Polkadot ecosystem as one of the most interesting and fastest growing. Polkadot and its sister network Kusama are groundbreaking designs, as the first blockchain ecosystems that enable many unique blockchains to interact fluidly. The sharded execution model with multiple chains (parachains, relay chains, substrate chains) will allow for highly scalable applications to be built. With this, there will be a massive proliferation of data, perhaps orders of magnitude greater than what we have seen so far on Ethereum and other Layer One blockchains.
This is what makes SubQuery so compelling, and why we are so excited to have co-lead this investment round — SubQuery, and more importantly the community around it, will directly benefit from this data explosion, just as The Graph has, being the first mover to provide data indexing to Ethereum. According to their website, The Graph started in
“January 2019 with only a few queries to approximately 30 million daily queries in June 2020, daily query volume in 2021 has continued to grow and has reached over 675 million queries per day.”
The Graph is focused primarily on Ethereum, but is not yet servicing Polkadot. SubQuery is poised to achieve similar success as the trailblazer on Polkadot.
Apart from the market opportunity, SubQuery’s founder Sam Zhou and his team differentiated themselves by having already built a successful infrastructure company, OnFinality. They are already serving millions of data queries each day to some of the largest projects in the space — Acala, Bifrost, Subscan, etc..
The team’s experience combined with SubQuery’s already working product and existing userbase makes us very confident in the team’s ability to deliver. We look forward to supporting Sam and the rest of the team on their journey in building this unicorn.
Founded in 2016 Stratos Technologies is a multi-faceted venture capital firm with expertise in financing, operating, and advising technology businesses. Since inception the firm has executed over $300M in credit and equity transactions in some of the most promising high-growth, technology businesses around the globe. Active from seed stage and beyond, we empower founders to achieve their vision through rigorous engagement, strategic guidance, and capital.