Engineers are the foundation of any technological product and blockchains are no exception. As the race between the different chains intensifies, communities of loyalists are scrambling to attract developers to their blockchain of choice in the hope that doing so will accelerate growth. And apart from the competition, without the right infrastructure and tools, the great ideas and promises of web3 have no chance of seeing the light of day. That is why Anand Iyer, who has worked at Microsoft as a “developer evangelist” trying to incentivize engineers to build on the company stack, is looking to do the same with cryptocurrencies, this time as an investor. Iyer, a serial entrepreneur with two successful exits, has spent most of the past year honing his interest in web3 as a visiting partner at Pear VC and an instructor delivering a DeFi masterclass to over 2,000 students. Now, the blockchain hobbyist who got his start in Bitcoin trading in 2013 joins the ranks of a growing group of independent GPs raising venture funds based on his own name and reputation. Iyer has raised $20 million in what he says was an oversubscribed round for his seed fund, Canonical Capital, he told TechCrunch. Participants in the fundraiser include several family offices and individuals from the venture capital and technology communities, including Shan Aggarwal of Coinbase Ventures, Marc Andreessen and Chris Dixon of a16z, Judith Elsea, Lux Capital, Mar Hershenson, Haseeb Qureshi of Dragonfly Capital, Dan Romero, Semil Shah, FTX Ventures’ Amy Wu and Bilal Zuberi, among others, the firm says. Canonical has already made 16 investments in seed and pre-seed startups spanning the developer infrastructure landscape, Iyer said. His portfolio includes Solana-based NFT marketplace FormFunction, low-code multi-chain dApp tool Thirdweb, and web3 messaging startup Notifi. The firm expects to make 40 to 50 investments in its first fund, writing checks between $250,000 and $500,000, he says.
Canonical Crypto market map of various segments within the web3 developer infrastructure landscape Image credits: Canonical Crypto Iyer sees the relatively small size of its fund as a key differentiator in a competitive space. Traditional ventures like Sequoia, a16z, and Silver Lake have made recent inroads into web3 developer infrastructure startups. “I didn’t want this to be too big a fund, or more than 20 million, because I can participate in many rounds. I can also invest in the early stages, so I’m not necessarily trying to compete for a certain percentage of ownership. I can write relatively small checks and still be a significant part of the startup journey from the beginning,” Iyer said. Even though developer infrastructure is a hot space for venture capitalists as of late, Iyer says he still sees it as an untapped area within crypto. “If you look at DeFi or dApps today, I feel like they are built by early adopters for early adopters,” Iyer said, adding that to expand its reach, cryptocurrencies need more people developing infrastructure tools.
