Venture Capitalist at Theory

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1 minute read / Jun 8, 2023 /

Web3 in SaaS Clothing

In the mid-2010s, every web1 company became a web2 company. This time it’s different. Many web3 companies will become web2 companies, too.

Why will web3 companies dress like SaaS mutton?

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If the current pace continues, web3 startup fundraising will fall by 73% in 2023. The absence of those dollars will flatten & shrink the already modest addressable market for web3 software & infrastructure.

Web3 software & infrastructure companies yearning to thrive will need to look beyond the web3 buyer base to new markets with larger willingness to spend. The cloud (web2 software & infrastructure) has captured 40%+ of a $1.5t annual spend on software.

Those billions are the future of web3 startup growth.

Web3 has created novel technologies that custody data, enable faster & more secure ways of moving money, guarantee provenance, & enable proofs of many things (identity, funds, insurance, presence to name a few).

But web3-to-web2 sales must be the future for companies to scale.

In that transition, web3 software & infrastructure companies will shed their language of wallets, blockchains, & tokens for terms most buyers understand : accounts, databases, & credits.

Web3 startups will sell software to web2 buyers & in the process become web2 SaaS businesses with unique & defensible architectural advantages & a different capital structure.


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