Dove Dispatch #60 (Philipp Zentner - LI.FI)
Hackathons, grants, building the ideal syndicate of investors, and much more
GM and welcome to Dove Dispatch #60!
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LI.FI is is on a mission to link critical DeFi infrastructure by aggregating bridges and DEXs on each chain.
They recently announced a $5.5M fundraising round led by 1kx, with participation from Dragonfly Capital, Scalar Capital, Coinbase Ventures, 6th Man Ventures, RockTree Capital, and others. Lattice, who maintains Dove Metrics, is excited to be participating in the round as well.
Founder and CEO Philipp Zentner dropped a ton of knowledge about his experience with fundraising.
Your funding announcement came quite late, no? Do you aim to raise another round soon?
Indeed, we kind of never stopped raising as we made it an integral part of our business development efforts. This means we let founders who aim to build on top of us, invest in us as well. That's why we got around 100 people in. It serves us quite well to have these people incentivized to work with us in the long run. We raised half of the round last year in July and the other half beginning of this year. We’re about to raise another seed extension now, to keep on growing and be ready and present when the next bull market is around the corner.
Dozens of teams are building various flavors of cross-chain bridges, but LI.FI sits on top of cross-chain bridges and aggregates liquidity across them – did this unique approach make it easier to convince investors?
Yes, it did and the more aware investors become of the complexity of the bridging landscape, it more so does.
What we’re seeing is that bridges are starting to focus on: individual features, different trade-offs (speed/security/expandability), different use-cases (DAOs, NFTs, games, etc.), different ecosystems, and plenty of other bridge-specific details. That means as an aggregator we can take off a lot of decision-making for developers while providing maximum optionality and thus, flexibility to adjust to changing needs. Aggregation in some way is a way to solve the interoperability trilemma.
Furthermore, we’re more than just a bridge aggregator. We also connect to DEXs, DEX aggregators, and smart wallet providers – which allows for transaction batching. Ultimately, LI.FI is creating a middle layer between the core DeFi infrastructure and the (d)application layer. You can think of it as a multi-chain railway system.
At the same time, we know that infrastructure and ecosystems are continuously progressing, changing, and breaking, so we absolutely believe in abstraction and reducing the decision-making process for developers. In essence, we build bridge abstraction so dApp developers don’t have to. We believe in that value proposition, and it doesn’t take much to make investors see this.
You guys received eight prizes across three hackathons and were finalists at ETHOnline 2021 – how useful was it in your fundraising process?
These hackathons were incredibly helpful. We actually wrote about that on our blog. It not only helped with attracting talent but also sent a strong signal to investors that our team was legitimate – which simplified the fundraising process quite a bit.
Cross-chain products, especially bridges, have historically been targets for hackers – how did you reassure investors who could have some concerns security-wise?
The main targets are the bridge’s liquidity pools. LI.FI, as an aggregator, doesn’t have its own liquidity pools. This alone makes it a less attractive target for hackers. We frequently audit our contracts (here and here) and even go a further step by working with security-related APIs, like Go+, to give an indicator of trustworthiness for all tradable/exchangeable tokens.
LI.FI applied for several grants (Metacartel, Gitcoin). Surprisingly, this non-dilutive form of funding is still underutilized by founders. How beneficial can it be for early-stage crypto startups? Any tips to provide on this topic?
The largest Gitcoin grant we received was about 100k. However, we didn’t even take it because we could raise venture capital. But it was a great signal that the community wants something like LI.FI. Gitcoin specifically helps in raising awareness for ideas and even does a bit of marketing as people who donate often also tweet about the projects they support. Just be honest in the end and actually pull the switch on Gitcoin, should you receive real funding in the meanwhile.
You guys made sure to build the ideal investor syndicate with 1kx leading the round (they are the largest investor in Connext and got reputable in the space with this piece) and several influential DeFi builders – why was it essential to have them on board?
With 1kx it simply worked well on multiple levels for us. First of all, the two founders are German, as our two founders. As we were new to crypto, it simply helped to have someone that knows our jurisdictive environment. At the same time, Lasse and Chris have been in the space for a long time and the feedback we got from everyone was very positive. Their network was invaluable for us and 1kx always makes sure to get their founders together with the most important people in the industry. Also, as you mentioned, in their article, they already understood the bridging topic very well. But all in all, we’re happy with all investors. A few others to name here are Lattice and Daedalus or the Lau brothers and Nick Chong or David Hoffmann. But really, everyone plays to their strengths as we need them. All of them do a tremendous job in connecting us with relevant players. We’re overwhelmed and incredibly grateful for all of them.
How far have you been strategic with the people and funds you take on your cap table?
We’ve been very strategic from the get-go. In the first round (pre-seed), we made sure of multiple things like getting bridge builders invested for direct knowledge exchange, getting DEX aggregator builders on board for the aggregation and optimization know-how, and on top, we made sure to have all geographic regions covered from the US to China. In our second round (seed) we almost only took potential direct integration partners on board. That really helped us with our go-to-market strategy.
Many thanks to Philipp for sharing such insightful insights.
Last week 48 projects announced fundraising rounds:
LI.FI ($5.5M) | Bridge & DEX Aggregation protocol — with participation from 1kx, Dragonfly Capital, Lattice, Scalar Capital, Coinbase Ventures, 6th Man Ventures, RockTree Capital, Darren Lau, Darryl Lau, DCInvestor, David Hoffman, Ryan Adams, Jason Choi, Anthony Sassal, Mudit Gupta, Igor Igamberdiev, Daedalus Angel Syndicate, Ahmed Al-Balaghi, Mo Dong, Pranay Mohan, Rahul Sethuram, Chandan Choudhury, AngelDAO, BairesDAO, SMAPE Capital, and Bankless.
Morpho Labs ($18M) | Optimizing DeFi lending — with participation from Andreessen Horowitz, Variant, Nascent, Semantic Ventures, Cherry Ventures, Mechanism Capital, Spark Capital, Coinbase Ventures, Daedalus Angel Syndicate, Stake Capital Group, Re7 Capital, AngelDAO, Atka, Faculty Capital, Nima Capital, Fasanara Capital, Spaceship DAO, Project A Ventures, Alven, XAnge, Daphni, Joey Santoro, Brianna Montgomery, Fernando Martinelli, James Simpson, Aseem Sood, Nicolas Bacca, Jai Bhavnani, William Bergamo, Nicholas Tong, Scott Lewis, Pablo Veyrat, Hadrien Charlanes, Will Price, Angelo Min, Frédéric Montagnon, Julien Romanetto, Itamar Lesuisse, Sebastien Couture, Pascal Tallarida, Benjamin Simon, Thomas de Phuoc, Emiliano Bonassi, Olivier Chevillon, Patrick Bucquet, Philippe Honigman, Nathan Sexer, and others.
Monopoly Millionaire Game ($1M) | Game distribution platform — with participation from Mirana Ventures, Kernel Ventures, Mint Ventures, CryptoJ, and Ventory Labs.
Qori ($1.8M) | The first mobile payment solution allowing brick and mortar merchants to accept bank2bank and crypto2fiat payments — with participation from Hottinger, Golden Record Ventures, Firestartr, Systema VC, and Guillaume Princen.
Animoca Brands ($75.3M) | Bringing digital property rights to video gamers and the Metaverse through the use of blockchain and non-fungible tokens (NFTs) — with participation from Liberty City Ventures, Kingsway Capital, Alpha Wave Global, 10T Fund, Generation Highway, SG Spring Limited Partnership Fund, and Cosmic Summit.
Crossover Markets | A digital asset exchange designed to meet the liquidity needs of institutional clients — with participation from Gate Ventures.
MetaOasis DAO ($1.5M) | One of the first DAO projects with a special focus on metaverse asset investment and development — with participation from Windvane, KuCoin Ventures, Stratified Capital, and NFTScan.
Nevermined ($3M) | The best of Web3 tech as easy-to-integrate components — with participation from Signature Ventures, and Polymorphic Capital.
Safe ($100M) | The most trusted platform to manage digital assets on Ethereum — with participation from 1kx, Tiger Global Management, A&T Capital, Digital Currency Group, Greenfield One, Rockaway Blockchain Fund, Blockchain Capital, ParaFi Capital, Lightspeed Venture Partners, Polymorphic Capital, Zee Prime Capital, Brevan Howard, Blockchain.com, Collider Ventures, Coinbase Ventures, LongHash Ventures, Prycto, Republic, The LAO, P2P Validator, IOSG Ventures, CMT Digital, ConsenSys Ventures, MetaCartel Ventures, Kraken, Signum Capital, UOB Venture, Fenbushi Capital, SCB 10X, GSR, Global Coin Research, Bixin Ventures, Blockdaemon, Arweave, Ledger, Questbook, Polygon, Orenda, Bollinger, Cryptocurrency Jobs, FalconX, Punk 6529, Lefteris Karapetsas, Corbin Page, Onur Akpolat, Hasu, Andreas Glarner, Luka Müller, Joel Thorstensson, Philip Stehlik, Markus Ament, Tarun Gupta, Orest Gavryliak, Evgeny Yurtaev, Eva Beylin, Anton Bukov, Alex Bazhanau, Manuel Garcia, Sebastian Bürgel, Poolpitako, Sergej Kunz, Stephen Young, and Will Papper.
YGG Japan ($2.8M) | A subDAO of Yield Guild Games (YGG) in Japan — with participation from Infinity Ventures Crypto, Animoca Brands, Yield Guild Games, YGG SEA, Akatsuki, Doublejump.tokyo, CryptoGames Inc., Arriba Studio, Kiii, Days!, Hironao Kunimitsu, Kazutaka Mori, and Hiroyuki Miyake.
Minteed ($3M) | Home for creators, a gallery for collectors — with participation from Fnac Darty.
Rungie ($1.5M) | Creating innovative products in the entertainment, art, and culture sector — with participation from K Fund, and Vizz Agency.
Change ($5M) | Supercharged donation APIs — with participation from Freestyle Capital, NEA, and Shrug Capital.
BR1 Game ($3M) | The world’s first risk-based shooter built on Solana — with participation from Solana Ventures, 6th Man Ventures, Shima Capital, and Justin Kan.
META WORLD ($30M) | Blockchain investment ecosystem meta world — with participation from Mai Vu Minh.
DeepNFTValue ($4M) | A crypto startup that estimates the worth of NFTs using machine-learning techniques — with participation from Rockaway Blockchain Fund, 1confirmation, and Cygni Capital.
Salto X ($5.3M) | Incentive token plans for remote companies — with participation from byFounders, Blockwall, Box Group, 3Commas, Liu Jiang, and Alex Gluchowski.
Curios ($5M) | Key to the Metaverse - API and tools to power any NFT business — with participation from Republic.
Torches | A decentralized non-custodial liquidity protocol based on KCC — with participation from KuCoin Ventures.
Intros AI ($1.3M) | Build meaningful connections in your community with Intros — with participation from Seed Club Ventures, Behind Genius Ventures, TSVC, Brutalist Ventures, Sriram Krishnan, Nicole Farb, Bradley Miles, Guy Miasnik, Neo, and Chase Chapman.
E4C: Final Salvation | The first Esports metaverse game.
Thalex ($7.5M) | A crypto-native derivatives trading platform with a focus on options and futures — with participation from Bitfinex, Bitstamp, QCP Capital, IMC Trading, Flow Traders, and Wintermute.
Tenderize ($3M) | Connecting Web3 with DeFi through Liquid Staking — with participation from Eden Block, TRGC, Figment Capital, Encode Club, and Daedalus Angel Syndicate.
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Blocko ($3.4M) | Managed service blockchain simplified — with participation from Daehong Communications.
FlexiDAO ($6.5M) | Providing digital solutions to help you embrace your 24/7 Carbon-Free Electricity journey — with participation from SET Ventures, EIT InnoEnergy, Google, and Microsoft Climate Innovation Fund.
Metag3ncy ($4M) | We offer NFT Marketing & Web3 innovative solutions for businesses and individuals.
Genopets | The world’s first move-to-earn NFT game powered by Solana — with participation from SamsungNext.
Tribute Brand ($4.5M) | This is the platform for contactless & cyber fashion — with participation from Collab+Currency, Lattice, Rogue Capital, RED DAO, FlamingoDAO, NeonDao, Kanosei Ventures, The Chernin Group, gmoney, and Megan Kaspar.
Hidden Road ($50M) | The global credit network for institutional investors — with participation from Castle Island Ventures, Citadel Securities, FTX, Uncorrelated Ventures, Greycroft, XBTO Humla Ventures, Wintermute, Selini Capital, Coinbase Ventures, Corner Ventures, and Profluent Trading.
Enjinstarter ($5M) | A blockchain gaming launchpad focused on growing the Enjin ecosystem and the metaverse — with participation from True Global Ventures.
Mirror World | A Web3 game matrix with NFT & Game-Fi elements — with participation from MH Ventures.
Silta Finance | DeFi bridge to a sustainable future — with participation from Cerulean Ventures.
Intain | The digital future of traditional structured finance, enabled by blockchain — with participation from Blizzard Fund, and JAM FINTOP.
Artbot.tv | A marketplace for music and video using blockchain technology — with participation from Elevate Ventures.
SEED ($41M) | Simulating the future of humanity — with participation from Animoca Brands, Kingsway Capital, Anthos Capital, Novator, Supercell, Roosh Ventures, AngelHub, and New Life Ventures.
Cauldron Studios ($6.6M) | Building new worlds that reimagine fictional experiences — with participation from Cherry Ventures, Cassius Family, Seedcamp, and Playfair Capital.
Autonomy ($5.6M) | The world’s first and only digital art wallet — with participation from Galaxy Interactive, and North Island Ventures.
Dimension X ($3M) | A Free-to-Play, Play-to-Earn strategic role-playing game on the Flow — with participation from Coatue Management, and Dapper Labs.
Oasys Games ($20M) | Eco-friendly blockchain built for the gaming community — with participation from Republic, Crypto.com Capital, Fenbushi Capital, Gate.io, Huobi Capital, Infinity Ventures Crypto, Jump Crypto, Krust, KuCoin Ventures, Mirana Ventures, Yield Guild Games, Amber Group, Arriba Studio, Big Brain Holdings, Bitbank, BreederDAO, Builder Capital, Celer, Ceras Ventures, PlayMining, Formless Capital, NGC Ventures, Quantstamp, Resolute Ventures, Spectrum, Bonfire Union, TofuNFT, GREE, MOMENTRO, FGG, and AlphaCrypto Capital.
Planetarium ($32M) | A community-driven Web3 game company focused on delivering the future of entertainment through decentralized content and technologies — with participation from Animoca Brands, Krust, SamsungNext, and WEMIX.
Security Token Market | The global hub of security token data & information.
PORTALVERSE | A decentralized cloud-gaming network for creating an open & highly immersive Metaverse — with participation from NEAR, Octopus Network, Fusotao, Big Brain Holdings, Cogitent Ventures, and 2Moon Capital.
BlockSec ($7.4M) | Securing the DApp Ecosystem — with participation from Vitalbridge Capital, Matrix Partners, Mirana Ventures, CoinSummer, and YM Capital.
KoinX ($1.5M) | Crypto taxation platform — with participation from Sandeep Nailwal, Ajeet Khurana, Navin Gupta, Utsav Somani, iSeed II, Kube VC, Ratio Ventures, Tykhe Block Ventures, 1947 rise, WeFounderCircle, and Siddharth Malik.
qiibee ($4.8M) | The leading blockchain-based B2B rewards marketplace — with participation from Mainardo de Nardis, Phil Rubin, R/GA Ventures, Z5CAPITAL, Ben Davey, and Meet The People.
Rubix ($100M) | An L1 green blockchain protocol for peer-to-peer data transfer & transactions — with participation from LDA Capital.
Edverse ($700k) | Decentralising & democratizing education with the world's largest education metaverse — with participation from Blufolio, Crypto Oasis, Vulcan Forged, TDeFi, Grizzly Capital, and Encryptus.
Crescent ($5M) | A high-yield treasury platform with built-in security, compliance, and liquidity — with participation from Nathan McCauley.
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