Home Markets Polygon Founder Raises $50M for Web3 Venture Fund Focused on Emerging Markets – TechCrunch

Polygon Founder Raises $50M for Web3 Venture Fund Focused on Emerging Markets – TechCrunch

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Polygon Founder Raises $50M for Web3 Venture Fund Focused on Emerging Markets – TechCrunch

Ethereum Layer 2 Scaling Platform Polygon raised $450 million earlier this year in its first major funding round. Now protocol co-founder Sandeep Nailwal is launching another project, he told TechCrunch exclusively — this time, in the form of Symbolic Capital, a venture capital fund created by and for web3 founders. .

Nailwal, next door Wax co-founder Kenzi Wang, raised $50 million for the fund from investors including other venture capitalists, crypto exchanges, family offices and institutions, although they do not share specific names. Symbolic plans to primarily support companies that build decentralized consumer-facing applications (dApps), Nailwal said, a move that appears aligned with Polygon’s goal of accelerating Web3 application development.

“My main mission is to bring mass adoption to web3, and that mass adoption will only happen through apps. It’s not like I’m going to build a blockchain, and people will come and use the blockchain – nobody don’t use blockchain directly. They always use it through an app,” Nailwal said.

The fund has already made around 15 investments, including in web3 game studio BlinkMoon, Polygon-based metaverse Planet Mojo and esports platform Community Gaming, according to Nailwal.

As an Indian founder, Nailwal often sought to support his home country – he made the headlines last year, when Vitalik Buterin donated $1 billion worth of crypto to an Indian COVID-19 relief fund he organized. Through this new venture capital fund, Nailwal says he wants to allocate 80 to 90% of the capital to founders who, like him, come from emerging markets.

“It’s not closed for anyone building in Silicon Valley, of course not. But being from India, like, technically, I would be an angel investor or advisor for 95% of all the good projects you would see coming out of the Indian subcontinent – they would come to me one way or another , for help or advice,” Nailwal said.

Wang, meanwhile, is very familiar with the Web3 ecosystem in China and Southeast Asia, which gives him a broad view of countries around the world, Nailwal added. He sees founders in emerging markets as generally being more pragmatic due to the constraints they face compared to their more affluent counterparts in Silicon Valley.

“Because they’re all pushed against the wall for survival, they have to build something that will generate income, and they can survive on that,” Nailwal said. He added that he took a similar approach to developing Polygon, where he said he would test one new technology at a time and wait until it had acquired a certain number of users before experimenting with the next idea. .

This context is part of why Nailwal thinks Symbolic is uniquely positioned to help founders in emerging markets.

“A lot of them have the ability to build businesses that end up acquiring users, but you need to help them keep reinventing themselves and upping their game so that once they have a proven model at smaller scale, they continue to grow to a much larger scale and reinvent their ideas and business model,” Nailwal said.

A major motivation behind launching Symbolic for Nailwal was the opportunity to more formally support businesses that are already in its orbit, he said, adding that he doesn’t think he will have to spend much more to manage the fund as this will help it achieve synergies. relationships he is already building, thanks in part to Polygon’s own venture capital fund. He and Wang are already prolific angel investors in startups — the pair have co-invested in more than 40 companies since meeting at Binance Labs in 2019, he said.

Nailwal said that as part of Symbolic’s focus on apps, he’s particularly interested in startups that fall under the “creator economy” subsector, such as fantasy sports companies.

“In Web3 fantasy you can have NFTs, and you can rent those NFTs when you are not playing, so you can get passive income, besides you can earn the tokens on the platform and be part of the platform -shape from a very early stage,” Nailwal said.

These types of incentives can often be more meaningful for users in emerging markets, he added. He cited examples of Recent user growth of the Chinese “move-to-earn” app StepN and video game to win The attractiveness of Axie Infinity as an additional income for low-income workers in developing countries to illustrate his point. (Nailwal and Wang happen to be angel investors in Axie Infinity’s parent company, Sky Mavis).

“Many of these crypto models are able to achieve better sustainable economics in settings where the cost of living is much lower,” Nailwal explained. India’s Jio 4G network is arguably the fastest in the world and reaches even deeply rural areas, he added – infrastructure that could help web3 startups attract users across the country if they offer the right economic incentives.

Some web3 play-to-earn startups have been criticized for putting already vulnerable people at risk if something goes wrong, like the $625 million hack this happened at Axie Infinity’s Ronin Bridge in March. Nailwal acknowledged that this risk is “a problem”, saying he advises web3 entrepreneurs to provide as much education and disclosure to users as possible whenever a transaction takes place on their platform.

A key differentiator for Symbolic will be its internal data platform that the company has built to support its portfolio companies as well as to bolster its own due diligence process, Nailwal said. The platform will aggregate and analyze data such as GitHub contributions, Discord engagement and token performance as well as employment and hiring trends, according to the company.

Eventually, Nailwal hopes to create a “proprietary social ecosystem” around the platform, which he likened to Y Combinator’s network.

“We want to do [this] for the two portfolio companies, as well as for the founders, who we believe will eventually become angel investors in many new projects to come [through Symbolic]said Nailwal.

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