As a B2B software focused fund,  our team spends much of its time discussing which technologies are going to have outsized impact as industries are reinvented. Over the past few years that conversation has often involved technologies including AI/ML, IoT, and robotic automation.  However, more than any specific technology we tend to take an opportunity-first approach – where we look for strong teams that are solving meaningful problems with software in large industries such as healthcare, supply chain, logistics and fintech.

Which is why it’s a bit surprising to our team that we have become so focused on the potential business impact occurring at the intersection of crypto and blockchain.  As we have tracked the growth in crypto and the expanding use cases for blockchain over the past year, we’ve become convinced that there are some business challenges that web3 will be uniquely able to solve.  Is that a departure from our ‘problem first’ approach to investing? I don’t think so, it’s more of an acknowledgement that some technologies are uniquely poised to have an enterprise impact.  

What does web3 mean to us in the context of enterprise software?  Web3 is a decentralized internet, using blockchain and digital currency as means of sharing information and value.  There have already been impressive software companies that have been built to address opportunities in web3 — Blockdaemon is a great example in infrastructure and FIreblocks in institutional compliance and security.  Alchemy and Consensys have both raised significant capital to enable Ethereum application development for crypto native and non-crypto native businesses.

We believe that this is just the start. Things today are different than the first wave of non-crypto native software offerings a few years back where blockchain use cases were, in many cases, separate from crypto.  Crypto and the shared value potential of tokens is what is creating momentum in the space.  Software companies are growing quickly around Layer 1 blockchain scaling and on/off ramps, creating a more seamless fiat to crypto connection. We see these changes enabling a new crop of web3 companies that will build dapps to transform industries, and that is where we are focusing our attention.  

For instance how can blockchain be used to share patient information in the healthcare space — is there a world where the incumbent EHRs are disrupted by a permissionless network of HC data that is accessible to everyone, not by centralized players, and where participation by patients is incentivized by token ownership? 

Another area where we see a lot of opportunity in the next couple of years is supply chain and logistics.  Web3 is a great way to address some of the biggest opportunities in the supply chain, such as B2B payments, cross-border transactions, factoring, marketplace creation, transparency and tax credit enabled sustainability.  

While we are excited about applications for crypto native use cases, we think there is also a great opportunity to bring the power of web3 to bridge the gap between crypto and non-crypto native industries – so that a broader range of businesses can benefit from a digital store of value and the platform to organize disparate end users.  

NVP is currently investing in this space. If you’re getting started on a project that sounds like it might be a fit, reach out to dan@newark.vc