Thursday, March 28, 2024 | Ramadan 17, 1445 H
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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Investors strongly believe in web3

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Finally I can say that — at least in my work routine — things seem to be back to normal. I was in fact I was on a conference’s stage as a panelist for the first time in years. Except for wearing a face mask before and after the session, everything felt like the good old days. I was on stage with other investors and venture capital firms to debate the state of blockchain and crypto investment.


It appeared clear that the new buzz word is and will continue to be ‘web3’, but what it actually means, is still a matter of definition. In general we could say that web3 gives the ability to own pieces of the internet and interoperate with them. For example, you can buy a fancy (virtual) hat in an online game, and thanks to blockchain being able to wear it in a multitude of metaverses. It is for sure an overly simplified explanation, but the big firms in investment are definitely pushing towards that direction. Andreessen Horowitz made some significant moves the past month, with 20 deals closed. Despite Andreessen Horowitz being notoriously focused on US only investments, with few of them outside the Silicon Valley, the capital allocation and the field chosen for investment clearly show that web3 is here to stay.


When in 2019 all ICOs collapsed and blockchain was widely ridiculed for being slow and inefficient, the Decentralised Finance (DeFi) building blocks were being laid. Similarly, while the NFT market crashed and metaverses are seen as an oddity in the market, surely something is building up. Andreessen Horowitz just invested $40M on a Series A for Wyoming-based Irreverent Labs, which is developing artificially intelligent games with blockchain technology, as well as $24 million in a Series A for San Francisco-based Metatheory, which focuses on building Web3 games and virtual worlds. Also, as part of their 20 monthly investments, Andreessen Horowitz led a $15 million Series A for a blockchain-based developer of collectable combat role-playing games. The overall sentiment for investment is still strong. Tiger Global signed 16 deals last month, including a $20 million health-tech deal. Y-Combinator, Gaingels and Accel closed 11 deal each. Insight Partners closed 10 deals, including the leading position in a $150 million Series E for San Francisco based logistic startup Motive.


So despite the stock market and the crypto market being suffering, large investors see this as a great opportunity to shop around for investment bargains. However I believe that investment in startups and technology needs accountability more than ever. The crypto market has been plagued with scams. The 2021 NFT craze seems to have come to an end - for now - due to many reasons, including perhaps the countless scams and other security vulnerabilities. We have seen this before: initial hypes, followed by a sudden crash. However, this pattern seldom spelled the end for tech enhancements. Generally it is just a moment to reflect, patch what did not work, and get back to full steam with new ideas and renewed energy. When the market collapses and create a valley in the chart, large investors look for the next big thing, hoping to fund for the next Google or Amazon able to survive when the bubble bursts.


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