DeFi and beyond
Outlier was founded in 2014, this isn’t our first rodeo; in fact we’ve been through several cycles by now. Each bigger and with fundamentally different drivers.
Innovations in collateralized lending and ‘yield marketing’ in DeFi, combined with the wider macro environment, has created greater liquidity in crypto, raising asset prices (with some recovering to pre-crash price levels), whilst bringing in new capital and once again wider public / media attention.
Whilst we naturally welcome an improvement in market conditions we continue to invest based on venture cycles of 10+ years and a consistent set of simple fundamentals. These cycles always see a lot of people come and go but 7 years on we are one of the few still here with our reputations intact. We have and continue to remain deeply committed to Web 3 and its principles irrespective of where we are this cycle or the next.
When talking to a Web 3 accelerator, ask around, there will be a lot more popping up now prices are high. They will likely disappear as quickly as they came.
In fact, throughout the Crypto Winter of ‘19-’20 we were one of the few investors that ‘kept the lights on in Web 3’ (that was actually our tag line earlier this year) where we continued to back and accelerate early stage startups; over 20 in total, in the last 9 months alone.
This likely made us one the most active blockchain investors in the world, over the same period. And we are now set up to accelerate 30 startups a year, every year.
Whilst we actively encourage pragmatism we ask our portfolio to think as long-term as we do, beyond short term gains, and are now starting to see bets we made in areas like ‘data infrastructure’ several years ago such as Fetch.ai, Ocean Protocol, and more recently DIA Data, play out and even become in vogue.
But despite all this we are still very early in Web 3 with many missing bits of infrastructure (we have two RFPs to this end), poor UX, security and a distinct lack of product people. However, that is changing and is central to our mission and this next cohort’s thesis.
The DeFi narrative is undeniable and will form a large part of Cohort #4 but we will continue to double down on the Data Economy / Privacy Tech whilst building on successes in Cohort #3 in areas like The Metaverse.
We have supported teams raised over $130 million over the past 6 years. In 2020, despite the uncertainty of Covid -19 and the proceeding global down trend in all forms of investment our Base Camp cohort raised over $10m of growth funding.
Thesis Breakdown
For Cohort #3 we have a record 250 applicants and from that we accepted just 10. But don’t let that deter you. Whilst many of those did have a product, and some even paying customers there were a couple which were nothing but a great team with an idea.
The thesis below is not prescriptive and we don’t place quotas against any category, in fact we want to see everything Web 3 related, but these are narratives we know others are actively investing in and in the end our job is to help cohorts close their first seed round.
We segment each cohort thesis by generalised technology and vertical application and are now most focused at the application and middleware layer of The Web 3 stack, but still remain open to new highly innovative and unique primitives lower down should they emerge.
We generally invest in equity only but with token upside in the mid to long-term, with a heavy bias towards partial or fully open source code.
Going fully virtual with Covid has allowed us to work with a much more geographically distributed cohort of startups from Russia to Malaysia, Australia and Brazil. We intend to continue working with great Web 3 startups no matter where they are in the world.
We are a truly global Web 3 accelerator. Perhaps the only one.
Generalisable & Applied Tech
At this stage in the cycle we are typically more interested in applied technology than protocols such as generalisable smart contracting solutions which are increasingly saturated but continue to be open to key primitives such as Decentralised Identifiers and Self Sovereign Identity
- Smart Contracts (industry / use case specific)
- DApps (industry / use case specific)
- DLT (middleware utilisation)
- Machine Learning / AEAs (generalisable & use case specific)
- Data Markets (use case specific)
- DAOs (generalisable & use case specific)
- DEX (generalisable)
- Digital Security / Key Management
- DIDs (generalisable & use case specific)
- Privacy-Enhancing Technologies (PETs)
- NFTs (Non Fungible Tokens)
Domains
- DeFi
- Liquidity (Algo Market Making)
- Lending (Flash loans, Credit)
- Insurance & Risk management
- UX (Robo Advisors / Prime Brokerage)
- Metaverse
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- Gaming
- Spatial Web
- Non Fungibles
- Data Economy
- Data Marketplaces & Custody
- Verifiable claims
- Identity / SSI
- Privacy preserving computation
- ML / Agent based systems
- Consumer Tech
- Privacy Tech
- dCommerce
Requests for Proposals
As mentioned earlier for this cohort we have two specific RFPs both for projects we have incubated for several years and believe to be foundational to Web 3 but that now need a founder team to make their own and bring to market.
You might already be working on a startup in this space or a founder team passionate about the domain but looking for a great startup idea. Both of these come with ready made open source technology, partners and in some cases investors however the idea is applicants truly make it their own based on a distinct interpretation.
- P-DIDI – A tokenized instance of the Sovrin SSI protocol (read RFP)
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- You can’t have a decentralized web until you solve for decentralized identity. With Evernym and The Sovrin Foundation we have built an open source protocol specifically for DID read write access to deliver SSI and verifiable claims.
- ZIP – Layer 2, stablecoin for DApp interoperability (read RFP)
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- It is impossible to build a SaaS business via a DApp on a public network today because of the underlying volatility of tokens and gas prices. ZIP stabilizes both via a unique open source stablecoin.
