Alchemy’s valuation soars as digital collectibles go mainstream

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Alchemy co-founders Nikil Viswanathan (left) and Joe Lau.

Source: Alchemy

The start-up Alchemy is taking advantage as more and more companies try to sustain their activities by adapting their technologies to blockchain and digital collectibles.

The San Francisco-based company on Thursday announced a $ 250 million funding round, raising its valuation to $ 3.5 billion. The Series C funding, led by Andreessen Horowitz, marks a seven-fold increase in Alchemy’s valuation from April.

Alchemy acts as an intermediary between the blockchain, the technology made famous by bitcoin, and the applications that consumers could use on their phones. Its platform allows developers to build applications on blockchains such as Ethereum.

These behind-the-scenes building blocks were used to create Dapper Labs, the maker of CryptoKitties, NBA Top Shot, Axie Infinity video game, and OpenSea, the largest NFT marketplace. A record $ 69 million non-fungible token sold by digital artist Beeple was also funded by Alchemy.

Non-fungible tokens, also known as NFTs, represent ownership of a virtual item such as a digital artwork or sports collectible card. This week, Adobe, which works with Alchemy, announcement plans to let artists prepare NFTs in Photoshop. PwC also has a partnership with the start-up.

“The main driving force behind tech companies is trying to make their products sustainable and make sure they’re up to date with emerging technologies,” Joe Lau, Alchemy co-founder and chief technology officer, told CNBC. . “They’re young enough to remember what it was like to see new technology emerge – they want to make sure they’re on top.”

Its investors compare Alchemy to Amazon Web Services, which sits between the internet and companies like Netflix and Uber that use AWS to host their websites. Alchemy is also used to create applications such as video games and social networking in what some describe as “Web 3.0”.

“The biggest misconception about blockchains is that they are only about money, cryptocurrencies or finance,” said Ali Yahya, general partner at Andreessen Horowitz who led the fundraising round. “The truth is, they’re actually a lot more powerful and allow for a much broader set of applications.”

Alchemy has seen its revenue increase 15 times since April and by the end of October is profitable, according to its founders. The start-up has been around for four years, but just made its public launch last August. Former Yahoo CEO Jerry Yang, Linkedin founder Reid Hoffman, Jay-Z and Charles Schwab (the founder, not the brokerage firm), are among its early investors. Former New York Stock Exchange CEO Coinbase and PayPal founder Peter Thiel are also backers, as are Alphabet chairman John Hennessy.

Celebrities, musicians and professional athletes brought more attention to the NFT space this year. The frenzy is reminiscent of what marked a peak for the cryptocurrency markets around 2018, with the rise of the initial coin offering, or ICOs.

Alchemy co-founder and CEO Nikil Viswanathan compared it to the early days of the internet. “A lot of businesses are dead, but that didn’t mean the internet had no value,” he said.

“Likewise, we believe NFTs are here to stay,” Viswanathan told CNBC. “The blockchain has become a place where big companies like Adobe, who lead the tech ecosystem today, find value there.”


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