There’s been a lot of hype about “Web3”, but the reality is that it’s still a largely nascent and fragmented concept, and that has led to Web3 startups building platforms to engage with it more easily getting a lot of attention. In the latest development, a startup called thirdweb — which has created a development toolkit to make it easier to build and launch Web3 products such as blockchain games, NFTs, DAOs, marketplaces and more — has raised $24 million, a Series A that values the London startup at $160 million.
Thirdweb plans to use the funding to continue enhancing its developer toolkit — which currently covers some 10 features spanning areas like smart contracts, decentralised logins, publishing tools and more — to expand support for a wider array of blockchains; to bring on more users; and to grow its team, both via hiring and potentially acquisitions — all in aid of getting Web3 to become more mainstream.
Thirdweb has been live for just nine months, but it’s been on a roll: CEO Steven Bartlett told TechCrunch that to date some 80,000 developers — which range from independent creators through to organizations like Afterpay and New York Fashion Week — have built a range of NFT items, DAOs, games and other applications using its framework, And as of this week, some 150,000 smart contracts have been deployed across six blockchains. (And in case you’re wondering, he said Polygon is currently the most popular: “Cheaper fees is the straightforward answer,” he said.)
Projects are collectively generating $1.5 million in revenue weekly, although thirdweb is not getting a cut of that. There are no charges or commissions on thirdweb at the moment, the one exception being some of thirdweb’s enterprise customers paying a fee as part of their procurement policies, Bartlett said.
The funding being announced today also speaks to some momentum. The round is being led by Haun Ventures (the firm founded by well-connected ex-a16z partner Katie Haun), with strategic participation also from Coinbase Ventures and Shopify.
Coinbase had already been working with thirdbase — for example the latter is providing a development platform for creators to build NFTs for Coinbase NFT — and this will tie the two closer together. Shopify, meanwhile, is “seeing us as an investment but also a partner,” Bartlett said. He added that there is an integration in the works in which thirdweb’s toolkit will be made available to Shopify customers that want to introduce web3 products to complement, or within, their Shopify-powered storefronts.
These three join an already-long list of investors who backed thirdweb in its $5 million seed round. (That list included Mark Cuban, Gary Vaynerchuk, and more.)
The gap in the market that thirdweb is addressing is one that Bartlett said he discovered with his co-founder Furqan Rydhan when they were working on building a blockchain application themselves.
“We saw what hard work it was to build the application from the ground up,” Bartlett said. He compares the dearth of tools available to speed up blockchain work to the earlier days of the web we know today, when people also had to code websites, and all of the features within them, from scratch, versus modern times where one can, say, integrate a payments flow by way of a few lines of code and an API that connects to tech built and operated by someone else.
The opportunity was clear: build the same kind of tools for Web3. “We realized we could release as a product what we’d built to work on our own app,” Bartlett said. “We wanted to provide blockchain developers with the same kind of easy-to-use infrastructure, and tools, that they have in Web2.”
The co-founders’ past experiences likely also played a role here. Bartlett likes to tackle opportunities when they’re only starting to emerge: was an early adopter and proponent of social media and specifically brands leveraging it to grow, long before brands came to recognize social media strategy as a must-have. Rydhan, meanwhile, has a lot of experience around API-based tools for developers. Among his many past roles, he was the founding CTO of Applovin, a major player in apps monetization.
Part of Web3 still being a nascent, idealised concept is that the actual world of Web3 as it’s unfolding is still full of a lot of bumps and bruises. Right now, it doesn’t feel like a day goes by that you don’t hear about how yet another blockchain project has been hacked, or how prices are tanking in the once much-hyped world of NFTs; and that’s before you even start to consider that the flip side often just feels like a lot of empty and very self-interested speculation.
Thirdweb is part of that ecosystem, even if it’s not a direct operator of any blockchain exchange or smart contract, but Bartlett claims that they unexpectedly found that it hasn’t seen a drop in its business by association.
“The surprising thing is that the builders have continued building,” he said. “Our weekly growth activity hasn’t slowed down and has continued to increase. Our hypothesis has been that although there are fluctuations people who are building projects in the long term will continue regardless of the crypto or macro outlook.”
That’s one of the things that’s also been compelling to investors, too, he added. “Our data showed that we had bucked the trend.”
“Our mission is to accelerate the next generation of the internet and we believe thirdweb will play a critical role in realizing that,” said Katie Haun, founder and CEO of Haun Ventures, in a statement. “As complexity to develop in web3 continues to increase, the experienced team at thirdweb led by Furqan and Steven have built an elegant solution that allows developers to build fast while avoiding costly mistakes. I’m pleased to see proven founders of this caliber dedicating their next chapter to crypto and look forward to supporting their efforts.”
Longer term, I wonder if thirdweb will continue to pour resources into building all of its own tools, or whether it will open up, marketplace style, to bring in third-party developers including those that will emerge as specialists in specific categories. For now, Bartlett said that plan is to continue pursuing a full-stack approach on its own steam — aided potentially by acquiring teams and tech — not least because it’s still an early mover and has the opportunity to do so. It’s also why it’s opting not to introduce fees: do as much as you can to pick up critical mass as early as you can.
“We believe this particular play is winner takes all,” he said. “Our objective is to acquire as much of the base as we can. in future we will take a small fee for enterprise level clients, or a small fee for certain toolsets.”