Author: Zen, PANews
After entering the 21st century, with the advancement of science and technology and the rise of the digital economy, the cost and time of starting a business have been greatly reduced, and the number of entrepreneurial opportunities and entrepreneurs has begun to increase. However, the dramatic increase in the number of entrepreneurs has intensified the competition for scarce resources, and young entrepreneurs among them are often relatively inadequate in experience and knowledge.
Based on this, accelerators that provide key resources and knowledge-intensive business services have emerged and become a key factor in helping emerging projects grow. A group of accelerator platforms represented by Y Combinator (YC), which has incubated industry giants such as Reddit, Coinbase and Airbnb, have become an important force in the startup ecosystem.
According to the "2023 Web3 Industry Development Research Report" released by RootData, the number of Web3 developers has surged 66% compared with the previous cycle. Obviously, the Web3/blockchain industry, which is closely related to financial technology, also urgently needs the beneficial supplement of the accelerator platform. In fact, the Web3 industry is not without accelerator platforms, and Web3Port, which is becoming increasingly well-known, is one of the representatives. As the platform grows and develops, in February this year, Web3Port announced the establishment of a $100 million fund, Web3Port Foundation, and currently manages a $1 billion secondary fund.
Recently, PANews interviewed Chris, co-founder of Web3Port, and Ken, partner and investment director of Web3Port Foundation. The two industry veterans discussed in depth the business, development history and market dynamics of Web3Port, and shared their insights and thoughts on these topics.
Accelerator + venture capital, building a global Web3 startup ecosystem
As an early practitioner who entered the blockchain industry in 2017, Chris has witnessed the process of Web3 from being relatively new to gradually developing. In 2017, Chris participated in a leading public chain project, where he was responsible for market operations. This experience allowed him to devote himself to the forefront of the Web3 industry.
In 2018, Chris participated in the North American Family Office Cryptocurrency Fund. In 2020, after two years, Chris and other core members of the Family Office have invested in more than 200 crypto projects, including leading projects such as Polygon and 1inch. As the number of investment projects surged, he began to explore new opportunities. Is there a way to better manage post-investment projects in the pool and better support early projects? The prototype of Web3Port Labs was born at this time.
In 2021, Web3Port Labs was officially established. Web3Port Labs is a one-stop Web3 accelerator platform that provides full life cycle support for startups, including investment, financing, management, and exit. In the same year, it attracted support from many well-known investment institutions including SNZ Holding, HashKey Capital, and MH Ventures, and used the funds to expand the team size, business scale, and accelerate global market expansion.
After three years of development and expansion, Web3Port has now become a Web3 builder that integrates a one-stop standardization accelerator platform Web3Port Labs and an investment platform focused on cutting-edge technologies, Web3Port Foundation, aiming to create a prosperous, technology-driven global Web3 startup ecosystem.
The Web3Port Foundation currently manages a primary fund of $100 million and a secondary fund of $1 billion, most of which comes from the Middle East, Japan and other Asian regions. The fund is managed by an 11-person team and adopts an investment strategy of "primary as the main and secondary as the auxiliary". Ken, the foundation's partner and investment director, was a serial entrepreneur and has worked at Citibank and Ant Group. The accelerator business Web3Port Labs is managed by another team of more than 20 people.
"Currently, the team has a total of about 30 members, mainly distributed in Hong Kong and North America." Chris said that although the team is mainly in Asia, its accelerator and investment business are not limited to the region. Its investment portfolio includes decentralized GPU computing network Aethir, zero-knowledge interoperability protocol Polyhedra, Web3 social UXlink, LSD protocol Puffer Finance, etc., of which about 59% of the projects are from the Asia-Pacific region and 41% are from other global markets.
Payment infrastructure will be key to driving growth
Since the beginning of the year, after the establishment of the Web3Port Foundation and the launch of a $100 million primary fund, Web3Port has frequently appeared on the investor lists of various financing news. In the first half of the year, there were nearly 20 related news flashes released by PANews alone. In the interview, Chris and Ken revealed that Web3Port currently focuses on seven areas: AI, payment, DeFi, depin, social, various core infrastructures (Infra) and RWA.
Chris said, "AI has a solid position in the traditional market, and everyone agrees that it is a field with certain growth. The combination of Web3 and AI can bring many opportunities, especially in data storage, ownership and settlement, where Web3 can play a key role." Ken added that in the AI track, the capital noise of Web2 has already overflowed, with AI investment in the traditional market reaching more than $30 billion in the first half of 2024 alone, while AI investment related to Web3 is only about $1 billion. "Therefore, we believe that future capital overflow will inevitably spread to Web3, especially at the intersection of AI and Web3. This trend will change the original data value transfer and the production relationship between models and applications."
Ken's experience at Citibank and Ant Group has made him very familiar with traditional payment systems and has unique insights. He believes that payment is the cornerstone of the entire digital economy. Without the infrastructure of digital payment, e-commerce, food delivery, red envelopes, and various offline QR code payment will not exist. "Therefore, we have spent a lot of energy on the payment track, and we also believe that it will be the core of promoting the incremental market activity of Web3." Chris also pointed out that one of the core functions of Web3 is to solve payment problems in cross-border payments and high-frequency transactions, and said that when Web3 payment can be truly connected with traditional payment, it will bring immeasurable growth.
In addition, as a native financial product of Web3, although DeFi has not yet made a disruptive breakthrough, it has potential for innovation and is still worth paying attention to in the future. Tracks like DePIN and RWA connect the traditional market and Web3, bringing new users and asset increments, and playing the role of a bridge for Web2.5. "The social field is also our focus, which can bring traffic from the traditional market to Web3. In particular, projects like UXLink, with their Web2 background and traffic resources, show great potential."
People-oriented, team quality and technical strength are equally important
Accelerators usually provide funding, mentor guidance, market resources and other support, but these resources are limited, so a certain screening mechanism is needed to ensure the selection of the most promising and growing startups, so as to achieve the optimal allocation of resources and improve the return on investment. As a fully standardized accelerator platform dedicated to "investment, financing, management, and withdrawal", Web3Port has explored an innovative funnel model screening mechanism. As for the important considerations involved in evaluating the project team, Ken summarized three main aspects, including team vision, industry values and technical strength.
"Whether it is Web2 or Web3, there are many similarities in the requirements for founders. We always believe that projects are 'people-oriented', and what matters most is always people and teams." Ken believes that the founder's belief in the industry, the understanding of the track, and the attitude when encountering difficulties play a crucial role in the success or failure of the project. "We attach great importance to the values and tone of the team behind the project. For individuals, tenacity and excellent ability are crucial; for the team, whether they can form a good chemical reaction and continue to generate strong execution is the key."
In the Web3 field, people often see many short-term projects that only seek short-term benefits and do all kinds of irresponsible behaviors to the market, investors and users. But at the same time, there are also many teams that have experienced the test of industry cycles and continuously polished their products. They constantly adapt to trends and iterate. Ken said that Web3Port pays great attention to the contribution of projects to the entire industry and track. Although some projects can make profits quickly at a certain point, it is not conducive to the long-term healthy development of the industry. "We don't pay too much attention to such projects. On the contrary, Web3Port has been deeply involved in the industry for many years and is well aware of the key factors required for the healthy and long-term development of the industry. We are committed to promoting the construction and growth of these factors."
The third point, and also a very important one, is technical strength. Technology is the moat of the project, and it determines the future market position of the project. "We firmly believe that every major change in the Web3 industry is driven by technology. Whether it is the early Distributed Ledger of Bitcoin or the smart contract of Ethereum, it is an industry advancement brought about by technological innovation." Ken said that technology is like bones, while token economics is the blood of the industry, and marketing is the external flesh and skin. Only a solid technical skeleton can support the healthy growth of a project.
Chris also shared some experience with ordinary investors on how to identify and avoid inferior projects that take the short-term rugged route: first, look at the investment background; second, look at the product capabilities of the team, and judge its maturity and experience by using the product; third, look at data traffic, such as their performance on Twitter, TVL (total value locked) and other data, which can reflect the operation of the project. Chris also reminded: "It should be noted that judging whether a project is rugged and judging whether it can make money are two different dimensions. If you want to judge whether the project will rise, this belongs to another level of problem, rather than simply avoiding rugged projects."
Full cycle acceleration, the world's first five standard modules
In terms of specific operations, accelerators generally provide strategic assistance and experience guidance, as well as build bridges for startups based on their resource networks to help these projects achieve rapid development and accelerate the process of product marketization. As a one-stop Web3 accelerator that can provide full-cycle acceleration and investment support, Chris summarizes the services and resources that Web3Port can provide into five modules: business positioning and economic model design (tokenization), financing, marketing, listing support, and other auxiliary support.
In Web3 projects, business positioning and economic model design are crucial, which directly affect the sustainability of the project, user growth, and differentiation from other market competitors. Based on this, Web3Port helps start-ups gain a foothold in the highly competitive market and attract long-term user participation by helping project parties with business positioning and assisting in the design of economic models. In terms of financing support, Web3Port can help project parties connect to the existing 700 VC networks and promote them to investors. In addition, its business resource network will also enable projects to complement each other through cooperation and business bonding, thereby expanding more opportunities.
Web3Port will also provide all-round market support and guidance to project parties, including marketing plans and event planning, and ensure that the project can obtain extensive market exposure by utilizing marketing resources such as KOLs and media. During the project listing process, Web3Port will provide strategic guidance to ensure that they can successfully complete the listing steps. Finally, Web3Port will also provide other auxiliary support modules such as audit companies and human resources company recommendations to meet the non-core, relatively small, specific or limited needs of various enterprises to promote the comprehensive development of the project.
Chris concluded: "Web3Port's full-cycle support covers all key links such as financing, marketing, and listing. Unlike other accelerators on the market, we have standardized full-cycle support. Our 20-person team is responsible for different departments, such as listing, marketing, etc. Each department works closely together to provide targeted support based on project needs. In this way, each department can be deeply involved and ensure that resources are fully utilized during the acceleration process, so as to truly achieve scaled and standardized support."
Waiting for market opportunities, the clouds will clear and the moon will appear
Since the establishment of the world's first accelerator, Y Combinator, in 2005, accelerators have long become an important element of the entrepreneurial ecosystem. However, in the field of Web3, real accelerators are still relatively rare, and many early accelerators have withdrawn from the market. Chris said that many people are reluctant to be accelerators because the return model of accelerators is relatively indirect. "The logic of direct investment is very simple and clear. Evaluate the project, invest money, and wait until the tokens are unlocked and sold. There is also an open and transparent mature system in the market to support this logic."
Chris told PANews that even though he and several partners have been working in the industry for many years and have a certain understanding of the industry, it is still very challenging to run an accelerator. He analyzed that there are two reasons: first, the returns of accelerators are unstable and often lag behind; second, the industry's recognition of accelerators is not high. Many people prefer funds or incubators because incubators can provide all-round support, while accelerators provide specific services on demand, such as financing or marketing.
"Back in 2021, it was really difficult for us to start the accelerator, but it was valuable that we persisted." In the two years when Web3Port was starting up, the entire industry was very depressed. The market was in a bear market for most of the time, and the environment was very difficult, which put accelerators with project parties as customers in an even more difficult situation. At that time, the size of the Web3Port team was less than ten people, and how to do a good job of the accelerator's system work was also a huge challenge. When asked how Web3Port would achieve multiple milestones and a series of achievements later, Chris summarized three key factors.
"First, we have persisted from 2021 to now. In the past two or three years, we have achieved actual results. The accelerator's project library has more than 2,600 projects, which is enough to prove this. In the early stage, we tried not to publicize our capabilities, but to prove ourselves more by accelerating the success of the project. Although this path is painful and long, it is solid and has accumulation, and it is also a manifestation of responsibility for the project and the Web3 market." He also pointed out that Web3Port has explored a path of standardization and scale in the accelerator and made substantial innovations, which are rare in the current market. And the last key element of success is that the market has given opportunities. In the first half of this year, there was a wave of market conditions in the market, which attracted many people in traditional industries to pay attention to the Web3 field. "Therefore, I think success depends not only on our own efforts, but also on market opportunities. And we believe that opportunities are still waiting for us."
Maintain the vitality of young funds and convey confidence to the market
In February this year, Web3Port decided to launch the Level 1 Fund based on the judgment that the market is in the early stage of a bull market. Although it was established not long ago, it has invested in more than 40 projects so far, with a total investment of about 30 million US dollars. So, will this frequent investment rhythm continue, and will Web3Port adjust its investment strategy according to the market cycle?
"The secondary market is relatively sensitive. Our secondary funds adjust their holdings according to market fluctuations. Overall, the returns of secondary funds are very good." Chris believes that there is a big difference between investing in the primary market and the secondary market. "But investing in the primary market is relatively less sensitive because the investment cycle of the primary market is longer." He said that as a young fund, it is necessary to maintain vitality and convey confidence to the market through continuous investment. "We not only need the market, but the market also needs funds like us that can continuously empower us to create value."
“Secondly, when the market is down, it is a good time to seize high-quality projects.” Therefore, even in the current market environment, Web3Port still maintains a relatively flexible and healthy investment strategy, screening 100 to 200 projects every month, and the actual investment projects may be between 5 and 10. Although the market is relatively sluggish, they still maintain a stable investment speed and are more willing to look for more Alpha opportunities at this time.
“Web3Port’s current achievements come from persistence. At least I think it is necessary to persist in project screening and investment in the primary market. This will allow us to maintain a high level of investment acumen. When the market improves, we may adjust our strategies in a timely manner and become more aggressive at any time. Although the current market is not as active as the bull market, our investment pace may not be as fast as when the market is good, but we still maintain a stable investment speed. Because our fund is still young, we can use this window period to give investment more time to find more Alpha opportunities and high-quality targets to prepare for the bull market.”
Still optimistic about the year ahead
As for the future market trend, Chris, who has worked with Web3Port to get through the difficult times, expressed cautious and conservative optimism.
"I think the current market is in a good cycle, and it cannot be completely called the early stage of the bull market. I personally predict that the market will get better in the second half of this year." Chris said that they have always paid close attention to the traditional market, because the performance of the Web3 market is highly correlated with the traditional financial market. Whether it is the interest rate cuts in the United States, the presidential election, or the liquidity changes in the traditional financial market, these factors will affect the performance of the cryptocurrency market, and it is difficult for it to develop an independent market now. "Therefore, first of all, we remain optimistic and believe that the second half of this year to next year may be a good time, based on the upward trend of the traditional market cycle."
"Secondly, I think the AI market and other emerging tracks may bring some new opportunities." Whether it is an APP or a new narrative, it may bring new possibilities to the market. Investment in the primary market usually seizes hot spots or trends. He said that in the first half of this year, we saw a wave of enthusiasm for Bitcoin, Layer 2 and AI, and even the rise of some traffic-based projects. But these hot spots quickly faded because they did not generate enough persistence and cash flow, did not bring sustained liquidity and traffic growth to Web3, and did not produce wealth creation and snowball effects similar to DeFi.
"Therefore, we believe that by the end of this year or early next year, we may see new applications or narratives in tracks such as AI, payment, and DePIN, which will drive the market. This is our optimistic expectation, but we cannot be sure that it will happen."
Chris also said that we should remain cautious because the liquidity of the traditional market is still poor, and liquidity affects not only the blockchain market, but also the traditional market. If the liquidity problem of the traditional market cannot be solved, even if we are optimistic, the market performance may not be as expected. Therefore, Chris believes that 2025 may be a good market cycle, but if the liquidity of the traditional market is seriously insufficient or the AI bubble bursts, then the second half of 2025 may enter an adjustment period earlier.
The infinite possibilities of Web3 in the Middle East and Africa
Although Web3Port has always been concerned about the development of the global market, it is currently paying more attention to opportunities in the Middle East and Africa. In these regions, the infrastructure and innovation potential of Web3 have also become increasingly apparent. On the afternoon of September 18, "The Last Gold Mine of Web3" hosted by Web3Port, Klickl and Royal Prestige Group will be held in Singapore. The co-organizers of the event include Coinlist, C1 Fund, Comma3, EVG, HashKey Capital, IOSG, Metamask, Nomad, Summer Capital, SevenX, SNZ and many other well-known Web3 companies or institutions.
It is reported that Klickl is the leading Web3 open financial platform in the Middle East and North Africa, providing a range of services including banking, digital payments and cryptocurrency transactions to facilitate seamless access to Web3. Royal Prestige Group (RPG) is a holding company focused on promoting and developing diversified businesses in key areas in Abu Dhabi and internationally, investing in real estate, technology, biotechnology, energy and finance to achieve sustainable long-term returns.
The conference will focus on exploring Web3 development opportunities in the Middle East and Africa. Web3Port and Klickl will jointly announce a series of major initiatives at the conference to establish the UAE's strategic position in the new era of Web3. As a participating media, PANews will continue to follow up on this conference.
