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Can infrastructure company Alchemy become the AWS of Web3 after raising over $300 million?

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Currently Alchemy can support almost every NFT in the world.

Title: Web3 Infrastructure Alchemy, 5000 Words, Raised over $300 million

原文作者：阿法兔, 阿法兔研究笔记

IBM underestimated the PC market in the Web1.0 era, and Microsoft jumped into the fray with Windows. Web2.0, the browser and mobile OS took off, and apple and Google conquered the market. If Web3 does arrive, Alchemy is a company worth studying as an infrastructure in the crypto ecosystem. The serial entrepreneur, a Stanford grad, has gone from a valuation of $100 million to $3.5 billion in a year, with investors including Jay Z and Will Smith and users including OpenSea.

What is the story of Alchemy's startup and development? What do we learn from Alchemy's growth? How do investors perceive the company? What are the potential problems for these companies? These are some problems that this paper tries to discuss.

In this paper, the structure

1. Company Profile

Founder background financing process Alchemy users

2. Overview and business model

Business Model: Alchemy -- What needs are met by AWS for crypto Racetracks

3. The development of Alchemy company

Why Alchemy Notify when it's all about user experience? What is the pain point of the market? What are the problems existing in the current blockchain development environment? Alchemy's application in DeFi comes from the user's voice

4. Investor perspective

A16Z

5. Other evaluations

Potential problems with Alchemy

6. Founder's Vision

Company profile

Alchemy aims to be the AWS of the Web3 world -- Alchemy

Alchemy was founded in 2017 as a blockchain infrastructure company. The main business is to provide blockchain development platform services for blockchain developers and improve user experience. It currently operates in 197 countries and has millions of users.

By building development tools and computing infrastructure, Alchemy aims to realize the future of MultiChain. Developers and engineers can build applications on a variety of blockchains by using Alchemy's tools and computation-based infrastructure to help developers on many different chains. In 2021, Alchemy laid the groundwork for more than $45 billion of Web3 transactions for tens of millions of users around the world through a cross-chain approach.

Founder background

Co-founder and CEO

Nikil Viswanathan CEO

A serial entrepreneur, He graduated from Stanford University with a master's degree in computer science and is the co-founder of Down To Lunch. NIKIL previously worked on products at Google, Microsoft, and Facebook.

Co-founder and chief technology officer

Joe Lau CTO

Joe Lau graduated from Stanford University with a MASTER's degree in computer Science. CTO, co-founder, serial entrepreneur, former engineer at Pinterest, Google, and Linkedin.

The two founders of Down to Lunch, a social networking platform, are aggressive and frugal. There was a time when NIKIL's iMessage crashed due to the influx of thousands of text messages from Down to Lunch users. NIKIL then sent a bold "you are our only hope" email to Apple CEO Tim Cook, who helped them solve the problem. The two entrepreneurs, known in start-up circles for their frugality, once camped out in an office for six days in a row, while many of the company's previous employees worked from cardboard boxes.

Finance course

Alchemy raised series A funding in April 2019;

In December 2019, AlchemyA raised $15 million in a round led by Aditya Agarwal and other institutions;

On April 28, 2021, Alchemy raised a series B financing of $80 million at a valuation of $500 million.

On October 28, 2021, AlchemyC raised $250 million and valued at $3.5 billion.

Investors include former Citigroup CEO Vikram Pandit, DoorDash CEO Tony Xu, Morgan Stanley PRESIDENT Vikram Pandit, Alphabet Chairman John Hennessy and Coinbase, as well as entertainers, Will Smith, Jay Z.

Alchemy of users

Alchemy's key customers: photo from our website

Alchemy's enterprise users include Binance Wallet, OpenSea, CryptoKitties, Kyber, 0X, Binance Wallet, Gods Unchained, Opera and Maker, among others. 70% of the top blockchain applications in the future are using Alchemy's developer tools, which could represent a significant improvement in the quality and time-to-market of application developers.

Overview and business models

Business model: Alchemy -- AWS for crypto Racetracks

According to Nikil, founder of AWS(Amazon Web), Alchemy aims to become the Web3 world. The Web3 ecosystem includes different types of applications and software programs that run on the blockchain. In the Web2.0 era, in addition to its shopping business, amazon also has an AWS business, known as AWS, which accounts for two-thirds of amazon's profits and is worth more than $1 trillion. Alchemy is a very similar concept to AWS, except that it is the development platform for the blockchain industry. Currently Alchemy can support almost every NFT in the world.

To further explain, Alchemy is like a B2B software development stack that can help developers easily build applications that run on blockchain. Blockchain networks and Dapps need to find a way to interact, and Alchemy provides an out-of-the-box solution where developers can focus on building applications for users.

What needs are met?

In the blockchain industry, companies typically have to spend tens of thousands of dollars to set up and operate nodes that interpret and write to the blockchain. The problem is that it's slow and expensive, and it sucks a lot of engineering resources. More troubling, node architectures may not support large-scale applications and load balancing across servers, and problems arise when nodes mistakenly return unsynchronized block numbers. If the blockchain application is slow, flawed, or completely crashed, the siege lions will spend a lot of time putting out fires.

Alchemy applied a completely different decentralized architecture, separating different types of data into special data stores for speed and reliability, which means that applications can be built on-chain with fewer engineering resources, much like Amazon's AWS.

The history of Alchemy

"Push notifications are an integral part of the user experience that enables users' needs and is essential for the entire DApp ecosystem to thrive. Experience is absolutely essential, and users expect blockchain products to be at least as good as, if not better than, traditional web and mobile products."

In 2018, Alchemy joined Google's Launchpad Studio accelerator, relatively early in the business when it started with a $5 million market.

In 2020, it's all about the user experience

In 2020, Alchemy launches a new feature: Alchemy Notify, a push notification for developers that aims to replace the nodes that businesses use to read and write on the blockchain with a convenient and scalable infrastructure. It wants to coexist with a developer platform to provide a tool that can monitor, alert and debug cryptocurrency software.

Why Alchemy Notify? Where is the market pain?

The crypto track user experience has been criticized for being relatively complex for the average user. Opponents of encryption argue that the complexity of transactions, such as finalizing many blockchain protocols, means that cryptocurrencies are far from mainstream adoption.

This notification function greatly improves the interaction convenience between developers and blockchain programs. Users can know their real-time events on their blockchain at any time, such as interest earning, which tokens are missing, someone bidding on their NFT in real time, transaction status, etc., saving users a lot of time.

The CEO of Alchemy believes that addressing user pain points is always number one." If the blockchain industry wants to be truly successful, it needs to create easy-to-understand products that ordinary users can access.

Alchemy is focused on giving developers the capabilities they need to create these intuitive user experiences."

A set of data

Airship, a research firm that analyzed data from 63 million APP users, reported that users who received notifications within the first 90 days of installing an APP were about 300% more likely to continue using the APP and 820% more likely to retain it.

In productivity type apps, the retention rate of notification push users is 460% higher than that of non-notification users.

In other words, users of the crypto ecosystem need to interact more with SApp and applications. To address this pain point, the Alchemy Notify team surveyed hundreds of developers and found that there was a huge pain point in the user experience of crypto tracks.

Joe Lau, CTO of Alchemy. Alchemy Notify was launched to make blockchain products as easy to use as traditional web/mobile applications. You can understand the significance of Notify if you look at the huge impact and revolution that notification push has brought to mobile application ecosystems and apps in the Web2.0 era.

Diagram of Alchemy Notify function

In July 2020, Alchemy plans to launch Alchemy Build, which aims to transform the current problems in the blockchain development industry with new Build tools that are expected to make blockchain developers more friendly.

Problems existing in the current blockchain development environment

Alchemy's internal research shows that blockchain engineers spend up to 12 hours a week working on debugging, customer issues and release cycles, which is time costly and stifles innovation.

For the blockchain industry, the reliability of blockchain deployment is extremely important because it involves decentralized finance, internal operation of enterprises, public chain and other key locations. Some blockchain companies offer Bug bounties to white-hat hackers looking for flaws and vulnerabilities in their code, while some companies tend to delay project launches when weak and potentially vulnerable bugs are found.

But in the future, Alchemy Build, an app developer tool, can help blockchain developers solve some of these problems." Many blockchain developers also Build the wheel over and over again on the same problem, and Alchemy builds can simplify the development process.

& QuotWeb 2.0 has industry-standard tools like DataDog that make prototyping and debugging more efficient, but within the blockchain industry we still have people doing basic tasks like decoding hexadecimal rather than focusing on creating and developing the next breakthrough application."

In August 2020, Alchemy launched its official version.

& QuotAlchemy's mission is to make blockchain accessible to all developers, to spread the magic of blockchain to the world, and to continue to empower blockchain developers.

The application of Alchemy in DeFi

In Defi, Alchemy provides solutions for MakerDAO, 0X, and other Defi projects. In August 2020, CEO Nikil stated that more than 70% of well-known Ethereum applications, with a total value of over $2.8 billion of assets running on DeFi, are using Alchemy to access blockchain data.

According to Roham Gharegozlou, CEO of Dapper Labs, one of Alchemy's users, startups come through Alchemy. Management infrastructure ", coupled with "enterprise-class development tools and support", improves efficiency. By paying startups like Alchemy to access infrastructure and hardware tools to facilitate the use of blockchain data, developers can make it easier for blockchain startups to focus on C-side users.

Voice from the user

Alchemy, whose clients include OpenSea, Nifty Gateway, UNICEF and the Big Four accounting firms, has seen revenue grow tenfold from April 2021 to August 2021.

"By using Alchemy Build's development tools suite, we can develop our Web3 infrastructure much more easily," said Kent Barton, ShapeShift's HEAD of DEVELOPMENT. As we launch our blockchain product Microtick, it is important to focus on development.

"With Alchemy Build, we expanded our monthly audience to more than 200,000 listeners," says Sid Sethi, Audius veteran engineer. "We saved a lot of sleepless nights debugging code with these development kits."

In April 2021, AlchemyB raised $80 million at a valuation of $500 million.

In October 2021, AlchemyC raised $250 million at a valuation of $3.5 billion.

In 2022, Alchemy CEO said that the Series C funding will be used to further consolidate market share gains and continue to move into the crypto ecosystem and its business track.

Blockchain is being used more and more widely. More and more users are participating in crypto racetracks, using various blockchain apps to buy and sell assets, play games, store data, and more. All of these businesses must be software-safe, resilient and efficient, and through Alchemy developers can build applications on the blockchain early, one of the cornerstones of the cryptocurrency ecosystem.

Crypto track and ecology as a whole continue to gain traction, which will further increase the company's valuation. By the end of 2021, Alchemy's apps had generated $30 billion worth of transactions, with tens of millions of users. Most NFT companies around the world are using Alchemy.

Investor's view

Ali Yahya From A16Z

Modern blockchains are programmable blockchains. Like a PC, like a smartphone, blockchains can be viewed as a new type of computer with unique capabilities: allowing programmers to write code and make promises about how it works. Bitcoin, for example, promises only 21 million bitcoins forever.

Each new computer needs its own operating system, its own platform, and a set of tools that make it easy for developers to build something new. PCS have always been powered by Mac OS and Windows, and smartphones have always been powered by iOS and Android. For cloud computing we will use AWS, Azure, Google Cloud, etc. Apple, Google, Amazon, and Microsoft, by building these platforms, have become some of the most influential and valuable companies in human history.

Similar to the way apple and amazon as developers built development platforms on PCS, smartphones and the cloud, Alchemy is building operating systems and developer platforms for the coming Web3 era. Alchemy is building a platform company that empowers developers in the modern blockchain ecosystem.

The founders are focused and mission-driven, with a big picture and vision. With strong execution and excellent team building ability, I soon gathered the world's top entrepreneurial team.

In terms of business metrics, Alchemy's growth over the past year has been phenomenal, quickly outpacing its competitors. The Alchemy platform currently supports most of the leading companies and protocols in the Web3 space, including Aave, Axie Infinity, Dapper Labs, Flow, OpenSea, and more. Based on the Alchemy infrastructure, over $45 billion of Web3-based transactions take place on Alchemy each year, and that number is growing rapidly.

Other evaluation

What are the potential problems with Alchemy?

The biggest threat to the company is the speed at which crypto tracks will become a huge market, even though Alchemy has made a lot of money selling tens of thousands of dollars in tools and service packs. However, starting the flywheel of blockchain developers and truly stepping into the business of serving mainstream users is a breakthrough success.

As a development and engineering focused company, it would be relatively difficult to convince businesses to outsource critical parts of their infrastructure to Alchemy if they were sales oriented.

Alchemy just hired its first salesperson some time ago to sell business to business giants interested in blockchain. But since Alchemy does help industry companies solve problems and meet their needs, that's fine.

The vision of Alchemy's founders

"Over the next few years, we really want to empower the entire blockchain industry, which has faced different challenges, to grow and try to bring this technology to everyone on the planet."

"In Silicon Valley, there are two relatively grandiose metrics for startups -- how much money you raise and how many people are on your team -- but in reality, we want to be as successful as possible with both metrics as low as possible.

Shifts in technology paradigms typically occur every 20 to 30 years. If we are facing a massive technology shift, there is an opportunity to build a true infrastructure company in this space. This is our vision, not just about money."

What do you think the future holds for Alchemy? Will it be "AWS" in the blockchain ecosystem?

References:

1.https://a16z.com/2021/10/28/investing-in-alchemy/

2.https://techcrunch.com/2018/09/05/googles-launchpad-studio-accelerator-welcomes-a-cohort-of-blockchain-and-finance-sta rtups/

3.https://cointelegraph.com/news/alchemy-pushes-real-time-crypto-notifications-to-your-device

4.https://cointelegraph.com/news/alchemy-pushes-real-time-crypto-notifications-to-your-device

5.https://www.coindesk.com/markets/2020/06/09/alchemy-notify-wants-to-simplify-blockchain-ux-with-a-single-push/

6.https://finance.yahoo.com/news/alchemy-goes-public-developer-platform-141020324.html

7.https://finance.yahoo.com/news/blockchain-development-platform-alchemy-exits-142136549.html

8.https://technode.global/2021/01/15/crypto-com-announces-partnership-with-alchemy-to-enhance-its-developer-platform/? utm_content=buffer2b80a& utm_medium=social& utm_source=twitter.com& utm_campaign=buffer