In brief
This is Alchemy’s third massive fund-raising round in less than a year.
The company touted a three-fold increase in customers since October.
The founders addressed claims Alchemy might contribute to centralization.
Alchemy, a startup that provides blockchain tools, has been growing fast: It raised buckets of money last year and attracted dozens of blue chip customers in the crypto world and beyond. Now it’s growing even more.
On Tuesday, Alchemy announced it has raised another $200 million from the prominent venture capital firms Lightspeed and Silver Lake, giving the company a valuation of $10.2 billion. The funding is technically an extension of the Series C round that Alchemy announced in October, which saw it raise $250 million at a $3.5 billion valuation.
The latest numbers are a staggering jump from last April when Alchemy raised $80 million at a half billion dollar valuation, and reflect how the startup has hit upon an extremely lucrative niche supplying blockchain picks and shovels to the rest of the crypto industry.
Founded less than two years ago by Stanford grads Nikil Viswanathan and Joe Lau, Alchemy builds tools that let companies easily interact with blockchains—writing transactions, hosting nodes and so on. Its initial product suite focused only on Ethereum, but today Alchemy offers tools for an array of other blockchains, including Flow and Polygon.
In announcing the latest funding news, Alchemy said that the number of teams using its services has trebled since October and that the value of on-chain transactions it has powered has increased from $45 billion to $105 billion.
Alchemy’s customers include big crypto names like Coinbase and OpenSea, but also well-known investment banks, which the company say it can’t publicly identity due to confidentiality agreements.
Viswanathan and Lau appear to be taking the hyper-growth in stride. In an interview with Decrypt, the Alchemy founders said they remain focused on customer service and carefully expanding their team. Meanwhile, they say that the startup has long been extremely profitable and that it hasn’t needed to touch the vast amounts of capital it has raised—bringing on Lightspeed and Silver Lake was primarily about adding coaches and mentors, they say.
So far, Alchemy has excelled at avoiding the turmoil that fast-growing startups often encounter. Something like a controversy arose in January, however, when the influential coder and Signal founder Moxie Marlingspike mentioned Alchemy and its competitor Infura in a widely read blog post.
Marlingspike’s post, which set out a broader critique of Web 3, noted that many companies rely on Alchemy to carry out day-to-day operations without ensuring the privacy of user data, and that this amounted to a form of centralization—a situation anathema to decentralized ideals of crypto.
Viswanathan rejects the allegations.
“I understand he’s coming into web 3, and exploring. He got a lot of things wrong,” Viswanathan said. “The thing he doesn’t understand about Web 3 infrastructure is we don’t shut off data.”
According to Viswanathan, the centralization claims are unfounded because Alchemy doesn’t act like a central gatekeeper such as Amazon Web Services, which can shut off individual actors at will. He added that Alchemy doesn’t deal in proprietary data, noting that all the transactions it facilitates are written to public blockchains.
As for the future, the Alchemy founders described 2021 as the year NFTs took center-stage. They expect the focus of the crypto industry—and by extension Alchemy—to shift to ordinary users as products become more accessible to the mainstream.
Meanwhile, the company is fine-tuning a series of recent initiatives, which include the launch of a free “Web 3 University” as well a venture fund called Alchemy Ventures. It also recently launched an API to help developers integrate NFTs into their websites.
Alchemy’s earlier investors include Coinbase, Andreessen Horowitz, Pantera, Coatue, as well as individual celebrities like Jay-Z, Jared Leto and Will Smith.
