An increasingly aggregated, centralized and monopolistic internet — in combination with a decaying socio-political environment that is spilling over into the digital domain — poses a real threat to free trade on the internet.

Existing platforms (Amazon, Alibaba, eBay, etc) run centralized marketplaces that they control, which at the same time can be vulnerable to external influence. Their terms, algorithms and pricing structures can put merchants and buyers at a significant disadvantage. They can also lock out merchants and buyers that happen to be outside of their scope of operations (e.g. type of products, geography).

OB1, the company behind OpenBazaar, is building an open source marketplace that is fully decentralized. There is no gatekeeper that can influence who can participate in the marketplace, what goods are sold and at what price. There is no central entity that can dictate search / ranking algorithms, control data of merchants and buyers, or charge any fees. OpenBazaar operates as a peer-to-peer network between the participants of the marketplace and uses bitcoin as its payment mechanism.

Its open platform approach also allows others to build applications and services on top of OpenBazaar — making the marketplace highly flexible and allowing for competing user experiences and services to be built on top of OpenBazaar.

Our Thesis

OpenBazaar launched in April this year, witnessing hundreds of thousands of downloads. The team is working on a major upgrade (OpenBazaar 2.0), and the new funding is going towards having the resources to fulfill that vision. If OB1 can develop OpenBazaar into a marketplace that is suitable for mainstream adoption and provide a substantially better business proposition to merchants and buyers, it could become a superior trade platform for large global markets. This would put OB1 into a position to build a very large business around OpenBazaar.

We’re excited to be backing the OB1 team together with Andreessen Horowitz and Union Square Ventures on their journey ahead.