Are Investors Realizing Web3.0 Potential?

Inflation, socio-economic issues, and the Russia-Ukraine war have dealt a massive blow to the global economy. The world is witnessing a massive cash crunch and the onset of funding winter has been news of worry for the startups and investors alike. However, the startups belonging to the Web3.0 space have not slowed down and witnessed funds flowing to them regardless of the grim situation.

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According to a report by Venture Intelligence, crypto and Web3 startups have raised more than $1 billion in funding across 43 deals in just the first six months of 2022. Top deals included Polygon's $450 million fund raised by SoftBank, Tiger Global and Sequoia India in February, cryptocurrency exchange CoinDCX's $136 million fund raised in April and treasury management platform Coinshift's $15 million fund raised in May.

"We will continue to invest in fintech, gaming and healthtech along with Web 3.0. In addition to these segments, we have also started to look into climate tech, especially climate + fintech opportunities," said Pearl Agarwal, founder, Eximus Ventures.

Similar views were echoed by Alok Goyal, partner, Stellaris Venture Partners is also buoyant of Web 3 space. "We are seeing a strong deal flow in a number of different spaces that includes fintech, Web3.0, SaaS and creator economy."

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Agarwal and Goyal were some of the venture capitalists who expressed intention to invest in the Web3.0 space while interacting with Entrepreneur India for its last edition.

Web 3.0 to relegate Web 2.0

Web3.0 has become an interesting space for the investors, consumers, and founders alike due to its potential to take over the world and relegate Web2.0. According to a report by InnoVen Capital, seven in 10, or 67 per cent, respondents believe that Web 3.0 will be something to watch out for. It has been dubbed as the latest version of the Internet that leverages machine learning, artificial intelligence, and blockchain to achieve real-world human communication.

"At Antler, we believe the creation of a new Internet and a new financial system are two of the biggest transformations that the world will go through, and we take a 5-10 year view of the space. We also believe India will play a leading role in creating the infrastructure and the talent base for Web3 to scale and reach billions of users. Hence, from a tech and infra perspective, we are continuing to double down, and this view is not impacted by short-term cycles or regulatory movements," said Nitin Sharma, partner, Antler India.

Crypto exchanges eye Web 3.0 too

Not only venture capitalists, but cryptocurrency exchanges are getting interested in the Web 3.0 space too. Lately, BINANCE launched a $500 million fund under its VC arm for blockchain and Web3.0 startups. The fund would be used to invest across three different stages: incubation, early-stage and late-stage growth. DST Global partners, Breyer Capital and other private equity offices, family offices and corporations have lended support to the fund.

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"The goal of the newly closed investment fund is to discover and support projects and founders with the potential to build and to lead Web3 across DeFi, NFTs, gaming, Metaverse, social and more," said Changpeng Zhao, founder and CEO of Binance.

Future outlook

Web3.0 projects that have been built on Web3.0 are more like infrastructure over the internet and many use cases are yet to be built. Implementation of real-world use cases would take time as the sector is still at a very nascent stage. However, the potential remains very high for the Web3.0 space.

"We can definitely foresee more unicorns in the Web3 space given the potential it holds. We strongly believe it is the future. The opportunity remains bullish considering the potential that lies, so the funding winter will not affect the companies whose fundamentals are strong and the roadmap is clear. As investors, we believe in investing in companies whose fundamentals are very clear whether it is in Web3 space or any other sphere where technology plays an integral part," said Mohammad Faraz, founding partner, Upsparks.

The advent of Web3.0 has opened up potential investment spaces for the investors as the internet becomes 'decentralized'. Despite being comparatively new, the Web3.0 space has made huge waves as Indian Web3.0 startups reach the unicorn mark and with technological advancements, there would only be more unicorns in the space.