Former Google AdWords executive launches ‘Web3’ search company with investment from Coinbase and leading VCs

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Last Updated on October 12, 2022 by Bitfinsider

With his new firm, a former Google employee of the highest rank aims to simplify blockchain searches.

Sridhar Ramaswamy, who oversaw the advertising division of the internet behemoth from 2013 to 2018, has founded a new startup named nxyz. Wednesday marks the official start of the initiative, which has attracted financing from a number of major investors, he told CNBC exclusively.

Ramaswamy obtained $40 million in May in order to establish nxyz as a separate organization from Neeva, a privacy-focused search engine he already owns. The round was led by Paradigm, a prominent crypto and “Web3” dealmaker, with participation from Coinbase, Sequoia, and Greylock, where Ramaswamy is a partner. Ramaswamy will continue to serve as CEO of Neeva while simultaneously leading nxyz.

Nxyz was created earlier this year by a team of developers from Neeva, an ad-free search engine that prevents internet monitoring tools. Ramaswamy founded Neeva in 2019 after leaving his position as senior vice president of Google’s $150 billion ad business a year earlier. According to him, he was disillusioned with the company’s unrelenting concentration on growth at the expense of customers.

According to a March blog post on Neeva’s website, nxyz is “an experiment introducing the same user-first philosophy of Neeva search to web3.” Web3 refers to the concept of a decentralized version of the internet that is driven by cryptocurrencies, nonfungible tokens, and other technologies. It advocates placing data ownership in the hands of individuals rather than Big Tech platforms, which use personal information to target people with advertisements.

In an interview with CNBC, Ramaswamy explained that blockchain technology presents the concept of decentralized computation, in which a piece of code is uploaded to a blockchain and executed there. “There is no leader. It is decentralized storage that is collectively owned. In addition, they have utility in the form of a native token currency designed to serve as an incentive for the system.”

Nxyz scours blockchains and connected applications for data such as how much a user has in their crypto wallet or which NFTs they are purchasing. Using APIs, it then transmits this data to developers in real time. The platform presently supports the Ethereum, Polygon, and Binance networks, and according to Ramaswamy, it intends to add more in the future.

Unlike Neeva and Google, the “Web2” behemoths that Neeva seeks to displace, nxyz’s Web3 search software is not geared toward consumers. Rather, it intends to supply clean blockchain data to huge crypto corporations, similar to how Bloomberg’s terminals business sells Wall Street organizations access to financial data and news. Ramaswamy identified BitGo as an early client with which it has cooperated.

He said that extracting data from the blockchain is a complicated procedure. Smart contracts, the software that powers cryptographic apps, can be assigned specific duties. However, after they are released into the wild, it might be difficult to determine what functions they perform in actuality. As an illustration, vulnerabilities in crucial smart contracts known as blockchain bridges have exposed the sector to huge hacks, with Binance and Axie Infinity-maker Sky Mavis’ bridges experiencing nine-figure breaches. A deeper understanding of the performance of these technologies could enhance security.

“It’s one thing to write executable smart contracts. However, you must keep a record of what they did. And how do I bring it to light?” Ramaswamy said. “The questions range from ‘What is in your wallet?’ to ‘If you’ve exchanged a USDC token for ethereum, what was the exchange and when did it occur?'”

Nxyz’s launch comes at a time when crypto investors are reeling from a steep decline in token prices, with bitcoin leading the decline.

the largest digital currency in the world, is down 70% from its all-time high. The present so-called “crypto winter” is primarily driven by the Federal Reserve’s rising interest rates and an industry-wide liquidity constraint.

This has resulted in a more difficult climate for crypto and blockchain-focused businesses attempting to attract financing, with Pitchbook data indicating that VC investment in such firms fell 37% to $4.4 billion in the third quarter from $7.6 billion in the previous quarter. Among those who have successfully raised capital, several have valuations that are flat or falling. Nxyz declined to divulge its valuation.

Ramaswamy stated that the company was fortunate to obtain money when it did. Discussions with investors commenced in mid-April and completed in mid-May, just as the so-called stablecoin terraUSD and its sister token luna began to plummet. When asked about deteriorating investor attitude toward cryptocurrencies, the entrepreneur stated that his company was “well-funded to weather the crypto winter” and required only 20 staff. “I believe it will go a totally different path” than Web3 and crypto startups that have experienced financial difficulties, he said. “We want to be cognizant of the current economic circumstances, construct cautiously, and ensure early revenue generation.”

Currently, the Nxyz team is located in Mountain View, Austin, and New York.

While the stock prices of cryptocurrency trading platforms like as Coinbase have decreased significantly, the infrastructure that drives “Web3” remains a target of interest. This year, companies such as ConsenSys, MoonPay, and Ramp have raised substantial sums of capital. Matt Huang, co-founder and managing partner of Paradigm, stated, “Web3 developers now lack fast, flexible, and dependable infrastructure to enable their apps, which inhibits the industry’s mainstream acceptance.” “We are happy to assist Nxyz’s very exceptional team, which has created the best data indexing infrastructure for Web3,” says Paradigm.

Nonetheless, Web3 has been a punching bag for certain Silicon Valley heavyweights, such as Twitter co-founder Jack Dorsey and Tesla CEO Elon Musk. According to John Lee, the blockchain lead at e-commerce company Shopify, the lack of a “single phrase and description” is a “common concern” regarding Web3.

“Every time a member of the general public has a chat with an industry professional, they receive a different definition and explanation,” Lee added. It is confusing to individuals.

In the meanwhile, the space is plagued with scams, including the infamous “rug pulls” in which fraudsters flee a fraudulent token project after pocketing sufficient funds. Ramaswamy acknowledges that “there have been many scams in Web3.” He expects, though, that more practical applications, such as video games, concert tickets, and remittances, would eventually gain traction.

Regarding whether Web3 can challenge the supremacy of digital giants such as Google and Meta, Ramaswamy stated that “the odds are stacked against” startups like his. However, employees of large IT companies are leaving in growing numbers to join crypto enterprises. This includes Ramaswamy’s oldest kid, who, according his father, has lately joined a Web3 startup.

When asked about his old job, Ramaswamy stated that he believes the business became a victim of its own success. He stated, “I believe Google to be a tremendously successful corporation.” However, its growth mindset mixed with its monopoly position results in a negative effect.

“Suppose there was just one toothpaste manufacturer in the entire United Kingdom. They would say that £1 is not enough. We’re going to charge £1.20 for it,” he added. “Google is similar in that it says, ‘Everyone uses us for searching, therefore you can keep increasing prices and it’s fine’ “I don’t believe it’s people being evil” — a reference to Google’s corporate code of conduct, “Don’t be evil” — “I believe it’s a system that requires growth at all costs.”

Google was unavailable for immediate comment at the time of publishing. Previously, the corporation told The Telegraph that its advertisements “help businesses of all sizes expand and connect with new clients.”

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