ConsenSys Ventures Looks Back on 2018

Reflections on our 2018 profile, investment theory, and Tachyon accelerator as we prepare for 2019.

ConsenSys Ventures, the early-stage VC arm of ConsenSys, was officially formed in September 2017. 2018 was a rollercoaster ride for the Ethereum community, including the investing side. We got excited about scalability and privacy, stayed far away from ICO’s, saw the beginnings of more formal SEC regulation in the U.S., and ended the year with renewed confidence that the Ethereum community is growing stronger by the day. We also saw the entrance of serial entrepreneurs from web 2.0 into the web 3.0 world, the attention of big tech companies like Facebook, Google, and Amazon turn to the blockchain space, as well as tons of other diverse groups beginning to explore, develop, and adopt blockchain and smart contract technology.

As we look back on 2018, we reflected a lot and adjusted our VC thesis in response to changing market and regulatory landscapes. We move into 2019 with continued excitement and faith in the entrepreneurs building the Ethereum ecosystem. Read on for some highlights from 2018!

Nine Exciting New Investments

2018 saw the ConsenSys Ventures portfolio nearly quadruple in size! Over the course of the year, we invested in many diverse areas across the web 3.0 stack and blockchain ecosystem, including exchanges, digital collectibles, wallets, zero knowledge cryptography, and more. See below for a recap of our venture investments in 2018:

Ink Protocol — Ink is a decentralized reputation and payment protocol. In 2018, they integrated into Listia, on which there are over 5 million listings using Ink, making the company one of the largest deployments of cryptocurrency in a regular consumer application in only a few short months. They also aim to launch a new decentralized marketplace powered by their blockchain-based reputation system in Q1 of 2019. The team also partnered with Coinbase Wallet to release the Ink Pay dApp, which will enable anyone to buy and sell on marketplaces using Ink, ETH, or Dai. The incorporation of a blockchain platform like Ink with Listia, a traditional VC backed company that was founded in 2009, has us optimistic that more web 2.0 companies can find exciting and innovative ways to incorporate blockchain into their platforms.

trueDigital — trueDigital was formed in 2018 and partnered with over 12 market makers to create innovative over-the-counter Bitcoin and Ether indices to settle a non-deliverable forward contract. During the launch of the indices, trueDigital worked to achieve CFTC approval for the first US regulated deliverable forward contract on Bitcoin, which will launch in 2019. trueDigital has on-boarded over 70 institutional firms in its first month of operation, and has also partnered with Signature Bank to create a blockchain based real-time payments platform with plans to support 40 currencies. We’re very excited about trueDigital, as we firmly believe the future in fintech lies in blockchain-based derivative products and other new asset classes that revolutionize global financial markets.

Dysopsis — Dysopsis is building out infrastructure for an open financial system, including CryptoMKT, a leading cryptocurrency exchange in Latin America. In 2018, CryptoMKT reached more than 170,000 users across Brazil, Chile, Argentina, Spain, Mexico, in addition to launching apps for iOS and Android. CryptoMKT and Dysopsis excite us because of our belief that local exchanges and trading/financial infrastructure will be developed across different geographies to accommodate distinct regulatory environments and communities.

Dada — Dada is a leader in the burgeoning crypto-collectible and NFT space with its unique platform for artists to create and sell rare digital art on a global scale. Dada had a busy 2018, reaching 100,000 drawings in July and making all artworks tradeable as NFTs, which makes them the largest provably-rare digital art collection in the world. Dada also partnered with another of our portfolio companies, Vault, bringing their digital art marketplace to iOS. Removing the middlemen in the artistic community to help artists own and be properly compensated for their work is an issue close to our hearts, and we are excited about Dada’s use of blockchain to solve this problem.

Vault — Vault is a secure mobile dApp browser and wallet, specializing in crypto-collectibles and web 3.0 usage, as opposed to merely holding and trading cryptocurrencies. In September 2018, Vault launched their easy-to-use and NFT-compatible wallet and dApp browser in the iOS app store. They also made further user experience strides by partnering with Simplex, allowing users to buy ETH with just the swipe of a credit card. We’re incredibly optimistic that the technical and product expertise of the Vault team will yield a compelling consumer facing product at the forefront of forging the UX for blockchain applications.

Unlock Protocol — Unlock is an Ethereum-based paywall-as-a-service protocol that allows creators (bloggers, authors, developers, journalists, etc) to monetize their content. In 2018, the company expanded its engineering team to five people, deployed a version of the protocol onto Rinkeby testnet, and successfully raised money from General Catalyst, Cherry VC and a host of others. We believe Unlock is paving the way for the future of content monetization on the web, of which the blockchain will be an integral part.

Starkware — Starkware, co-founded by Eli Ben Sasson, a leading professor in cryptography and founding scientist of ZCash, uses their novel zero knowledge cryptography of zk-STARKs to improve scalability and privacy on blockchains. In 2018, they not only presented at Devcon IV, but also closed a $30M equity round lead by Paradigm, in addition to Pantera, Scalar Capital, Multicoin, among others. Starkware is well positioned to become a leader in the growing application of zero knowledge proofs within blockchain systems for scalability and privacy, a trend on which we are very bullish.

Coinhouse — Coinhouse is a leading European platform providing end-end services to invest in crypto-assets. In 2018, the french spin-out of Ledger hit some exciting milestones, including launching version two of their platform, rolling out a professional services business, and successfully raising funds from Digital Currency Group and others. We believe Coinhouse is in an excellent position to become one of the leading financial platforms for retail and institutional crypto-asset investment in Europe.

Tenta — Tenta is building a secure, private, and encrypted browser, as well as an Ethereum-based Trust Protocol for the decentralized assessment and auditing of VPN nodes and other service providers. At the end of 2018, Tenta began rolling out the beta for its Tenta Mimic VPN service. We think Tenta has created of the most compelling privacy focused applications with its browser, and are excited by the Trust Protocol’s potential to bring trust and transparency to VPN nodes.

For more information on our investments in Coinhouse and Tenta, see our recent press release!

Impressive Portfolio Updates

2018 was a year not only for new investments, but also for incredible progress by our existing portfolio companies this rapidly developing ecosystem. See a (by no means exhaustive) selection of portfolio updates below:

BlockFi processed millions in loans, grew its team to 14 employees, expanded its lending practices to 46 U.S. states, as well as internationally, and closed $50M in lending capacity from Galaxy Digital.

Quantstamp graduated from Y-Combinator, grew its team, released the Quantstamp Betanet protocol on Ethereum mainnet, and performed smart contract audits for some of the leading projects in the industry, including Binance, OmiseGo, Chainlink.

Unikrn become the first esports betting company cleared to roll out a multi-regional esports book betting product for fiat and crypto by the Isle of Man. The company also launched its blockchain-based proprietary back-end wagering platform, as well as a patent-pending skill betting product which is legally accessible around the world, including in the United States. Additionally, the company launched Esports Bingo, a singular second-screen experience utilizing real-time esports events to create an engaging game of chance for gamers.

Successful Launch of Tachyon: the world’s first Ethereum-focused accelerator

In 2018, the Ventures team also accomplished the ideation, announcement, and launch of Tachyon, the first Ethereum focused accelerator program. Tachyon takes founders with incredible ideas for decentralized infrastructure and applications, and provides them with a 10-week immersion into the Ethereum ecosystem. Our first cohort featured hands-on mentorship from ConsenSys spoke and circle leads, had guest speakers from some of the most successful Silicon Valley unicorns, and concluded with a well-attended demo day filled with blockchain investors.

In total, the first Tachyon cohort received over 200 applications, and we’re excited to do it again starting this April in Berlin! Applications are now open at tachyoncv.vc and close on February 5th.

Expansion of the CV Team

ConsenSys Ventures also grew its team in 2018, expanding to 7 full time employees spread across four locations. Over the course of the year we added the following folks in order:

Kim Gomez — Our first hire in 2018, Kim is a rockstar operations analyst who helped manage all things logistics for Tachyon and is the glue that holds our team together on the day-to-day.

Praneeth Srikanti — Praneeth joined as a Principal with a focus on economics after wrapping up an MBA from ESADE and Chicago Booth School of Business, after spending time in product and tech at Microsoft and Oracle.

Terry Rossi — Terry joined as an Analyst after graduating from Princeton. Terry manages all things tech for the ConsenSys Ventures team, and also works closely with our Tachyon cohort.

Farah Mirboboeva — Farah joined the team as a Principal in summer 2018. She comes with experience in entrepreneurship, venture capital and holds an MBA from Chicago Booth School of Business

Rune Bentien — Rune joined the team as an entrepreneur-in-residence for 6 months after spending more than a decade at Google across various teams in Europe

You can reach out to the team anytime by emailing ventures@consensys.net

Reflections from Kavita Gupta, Managing Partner

“Looking back at 2018, one of the most exciting developments I observed was serial entrepreneurs and engineers with years of experience from leading web 2.0 companies entering and building projects in the blockchain space. This not only resulted in the development of some exciting new technologies, but also introduced a significant level of much-needed product and user experience expertise. Our investments in 2018 reflected this fundamental change in the makeup of the entrepreneurs in this space. Looking at 2019, I am very excited about continued development on infrastructure and scalability solutions.” — Kavita Gupta, Managing Partner of ConsenSys Ventures

Looking Forward to 2019

As we look ahead to 2019, we see a lot of opportunity on the horizon. We remain incredibly excited about Tachyon, and look forward to our next cohort this spring in Berlin! We also see a ton of interesting investment opportunities in the Ethereum ecosystem. Among other things, we’re excited about teams building out layer 2 scalability, the development of security tokens and security token infrastructure, the emergence of decentralized financial platforms for the lending and trading of crypto-assets, and more. Despite the bear market, we have no doubt that the Ethereum ecosystem is healthy, poised for a big year, and marching towards a full fledged infiltration into the systems we all use daily.

Keep an eye out for some other exciting announcements from the Ventures team. Happy New Year, and keep BUIDLing!