Hello world, and welcome to Dove Dispatch #17!
Today, we are digging into the Arweave funding landscape.
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Arweave is a data storage protocol built on its proprietary blockweave technology. It is developing an underlying network where data can be stored forever and accessed on its permaweb, a secondary layer where data is accessible in a human-readable manner.
Arweave has seen a spectacular run-up recently, with its market capitalization going from around $492M on July 7th to $2.4B today. Along the way, funds like Mechanism Capital and eGirl Capital have announced that they’ve established long positions.
The Arweave ecosystem has been experiencing a Cambrian explosion of growth: total Weave size, transactions, participants in Arweave’s Open Web Incubator/Fellowship/Foundry have all exploded over the past few months.
After pre-seed rounds led by Techstars and 1kx, Arweave raised $8.7M in June 2018 from 1kx, Greenfield One, Arrington XRP Capital, and others. Following those initial raises, Arweave completed a $5M seed funding round led by Andreessen Horowitz, Union Square Ventures, and Multicoin Capital. They welcomed Coinbase Ventures when they doubled down 6 months later with an $8.3M raise, with the aim at further developing community ecosystem funding initiatives.
Mirror, a decentralized publishing tool, is the highest-profile app built on top of Arweave (and recently raised at a $100M valuation). Out of 56 identified projects actively building on the protocol, only 9 have announced capital from external investors in 2021.
If we exclude the rounds for which there is no available data on the funding amount, Arweave projects raised $2.9M on average, compared to $19.3M for crypto-related companies in 2021. None of them raised at later-stage than seed, while the first ecosystem funding incentives were launched back in March 2020, with Arweave Grants and Arweave Boost.
Like the Celo capital market, Arweave’s funding ecosystem is still in its infancy. However, the protocol is investing heavily in programs to grow the ecosystem:
The Open Web Foundry: a program dedicated to helping early-stage projects building on Arweave bring their ideas to life and their MVP’s to market. Even some deep dives on fundraising hosted by founder Sam Williams are organized to help founders —Verto, ArDrive, CommunityXYZ, RedStonePianity, Amplify, OpenBits, WeaveID, Traxa.io are alumni.
Arweave Boost: another program offering up to $50,000 in free storage, access to core Arweave developers, and feedback from top VCs including Andreesen Horowitz, Union Square Ventures, 1kx, and Multicoin Capital.
As part of their focus on fostering and improving the ecosystem, the founding Arweave team also organized the Open Web Hackathon and diverse investment programs. Again, Andreesen Horowitz, Union Square Ventures, 1kx, and Multicoin Capital were key contributors. USV even put together a list of exciting ideas they would love to see built on top of Arweave back in March 2019.
It is still the very beginning for the ecosystem but some active investors like Bering Waters are getting their hands dirty: they recently enabled SOLAR Bridge, a connection between Solana and Arweave to store ledger data from the Solana blockchain onto the permaweb. Along with Metaplex, it explains why NFTs on Arweave took off this summer and put the light on the protocol.
NFTs activity on Solana should directly drive increased Arweave network activity, and keep attracting top investors to the space.
Last week 24 projects announced fundraising rounds:
Snook ($2.4M) | The first multi-player, skill-based game that rewards your talent, skill, and persistence with NFTs — with participation from DAO Maker, Seedify.fund, Trustpad, Banter Capital, Polygon, NGC Ventures, Psquare Capital, Maven Capital, Dokia Capital, coinIX, MVST:MG, Brilliance Ventures, Metrix Capital, Cointelligence Fund, SWGI, Lupa X Capital, Pluto Digital Assets, LucidBlue Ventures, and 6th Man Ventures.
Parcel ($2.5M) | Treasury Management for DAOs — with participation from "Dragonfly Capital, Scalar Capital, A.capital, ConsenSys Ventures, 6th Man Ventures, Cooper Turley, Leighton Cusack, Ryan Adams, Mythos Capital, Compound VC, Red Beard Ventures, OP Crypto, Scott Moore, Larry Sukernik, Jess Sloss, Siddharth Jain, Marc Weinstein, Joyce Yang, John Palmer, Tegan Kline, Alex Zhang, and Kenneth Ng.
UXD Protocol ($3M) | Algorithmic stablecoin backed 100% by a delta neutral position using derivatives on Solana — with participation from Multicoin Capital, Alameda Research, DeFiance Capital, CMS Holdings, Solana Foundation, Mercurial Finance, Anatoly Yakovenko, Raj Gokal, and Dylan Macalinao.
Trader Joe ($5M) | #1 DEX on Avalanche — with participation from Three Arrows Capital, DeFiance Capital, GBV Capital, Mechanism Capital, Avalanche Foundation, Stani Kulechov, Delphi Digital, Coin98 Ventures, and Not3Lau Capital.
Swan Bitcoin | A place to buy Bitcoin with your bank account using automated savings plans — with participation from Mike Alfred, CMS Holdings, Lyn Alden, and Mimesis Capital.
SorareData ($970k) | A one-stop shop for all Sorare stats — with participation from Kima Ventures, Cigny Labs, and Seedcamp.
Hyype ($1.5M) | A social network that will allow owners of NFTs to connect stories to the items in their collection — with participation from Electric Capital.
Fingerprints | A collector, curator, and producer of fingerprints of the blockchain: smart contract art — with participation from Andreessen Horowitz, Union Square Ventures, Variant, Divergence Ventures, ConsenSys Mesh, The LAO, and Pixel Vault.
SIMBA Chain ($25M) | A cloud-based, blockchain-as-a-service (BaaS) platform, enabling users across a variety of skill sets to implement dapps — with participation from Valley Capital Partners, Standford Law School, Notre Dame Pit Road Fund, and Elevate Ventures.
Larix | The lending gateway of Solana — with participation from Huobi Capital, Solar Eco Fund, Epsilon Trading, MXC Exchange, and BitMart.
Waterfall DeFi ($2M) | Bringing true risk tranching to DeFi — with participation from GBV Capital, Divergence Ventures, Ascensive Assets, AscendEX, ROK Capital, Boxmining, Genblock Capital, Marshland Capital, Morningstar Ventures, One Block Capital, Portico, Synaps, Leo Cheng, Kevin Tai, Xinshu Dong, and The Crypto Dog.
Exclusible ($2.2M) | A premium e-retailer for digital collectible assets in the luxury sector — with participation from Tioga Capital, White Star Capital, Indico Capital Partners, Shilling Capital Partners, Antonio Felix Da Costa, and Mitch Evans.
Zipmex ($41M) | Asia’s leading digital asset exchange providing you high liquidity and insurance on your assets — with participation from Bank of Ayudhya.
Syndicate ($20M) | Decentralized investing protocol and social network — with participation from Andreessen Horowitz, IDEO Colab Ventures, Variant, Table Management, Weekend Fund, Electric Capital, Sound Ventures, Scalar Capital, A.capital, Atelier Ventures, Thirty Five Ventures, Coinbase Ventures, Makena, Aave, Protocol Labs, True Ventures, Acrylic, Delphi InfiNFT, The Council Fund, Ryan Hoover, Lenny Rachitsky, Todd Goldberg, Alexis Ohanian, Scott Belsky, Matthew Ball, Packy McCormick, Alice Lloyd George, Jalak Jobanputra, Biz Stone, Boris Wertz, Ashley Tyson, mapleleafcap, Ryan Junee, Jonathan Glick, Jonathan Hills, David Eckstein, Snoop Dogg, and Bored Elon.
XMTP ($20M) | Building the communication protocol for web3 & crypto — with participation from Andreessen Horowitz, Atelier Ventures, Betaworks, Distributed Global, Form Capital, IDEO Colab Ventures, Hawktail, Leyden Ventures, Nascent, Not Boring Capital, Offline Ventures, Redpoint, Scalar Capital, Semantic Ventures, SK Ventures, Sound Ventures, Warburg Serres, Alchemy, Coinbase Ventures, StarkWare, Aaron Batalion, Alex Taub, Alexis Ohanian, Alison Grigonis, Anthony Pompliano, Anthony Sassano, Austin Green, Austin Rief, Balaji Srinivasan, Ben Huh, Bill Boebel, Bored Elon, Brian Forde, Bryan Flynn, Bryan Irace, Chris Coyne, Chris Kurdziel, Cooper Turley, Courtney Guertin, Dan Romero, Danny Newman, Derek Colla, Diogo Monica, Eamon Leonard, Eric Arsenault, and others.
Offchain Labs ($120M) | Building Arbitrum, an optimistic rollup protocol to scale Ethereum — with participation from Redpoint, Ribbit Capital, Polychain Capital, Pantera Capital, Mark Cuban, Lightspeed Venture Partners, and Alameda Research.
UniWhales ($2.2M) | Cutting edge DeFi data analytics — with participation from Signum Capital, HyperChain Capital, Impossible Finance, Double Peak, PopcornKirby, Kris Cheng, Sandeep Nailwal, Daedalus Angel Syndicate, Faculty Group, and Nick Tong.
ML Tech ($1.8M) | A FinTech startup building the next-generation trading platform within the crypto asset space — with participation from West Loop Ventures, Rebel One, OCA Ventures, and Floating Point Group.
Skeps ($9.5M) | Decentralized personal loans marketplace — with participation from Accel, and Bertelsmann India Investments.
Coinpanion | Enables you to invest in cryptocurrencies automatically and securely without any previous knowledge — with participation from High-Tech Grunderfonds.
Parallel Finance ($22M) | Decentralized lending, staking, and borrowing built on Polkadot — with participation from Polychain Capital, Slow Ventures, Lightspeed Venture Partners, Blockchain Capital, Alameda Research, Pantera Capital, Breyer Capital, 8 Decimal Capital, Blockchain.com, Blockchange Ventures, and CMT Digital.
Hats ($3.5M) | A decentralized cybersecurity incentive network. Governed by its community stakeholders of hackers, projects, and token holders — with participation from Greenfield One, Lemniscap, Spartan Group, Accomplice, Collider Ventures, and IOSG Ventures.
Exponent ($2.7M) | Enables professional quant-traders and data scientists to launch quant strategies in DeFi — with participation from KR1, Block0, Angel DAO, GSR, Golden Gate Ventures, Varys Capital, and Taureon Capital.
Daliado ($80k) | Offering the easiest way to co-own a second home and change it every year. Combining the best worlds of ownership and rent into one new thing
We have also added the following investors: The Council Fund, Hawktail, Leyden.vc, Offline Ventures, Warburg Serres, Mythos Capital, Floem Capital, Tokenomik, Node Kapital, Mimesis Capital and many angels.