Kickstarter’s Unexpected Shift to Web3: Ambitions, Challenges, and a Strategic Pivot

In December 2021, a crowdfunding platform exploring the Kickstarter model caught the attention of investors with a proposition to transition into a web3-oriented entity.

Fortune magazine highlighted that this development was unexpected, given that the Kickstarter team had dedicated years to building the company’s financial foundation, despite dwindling hopes of finding a buyer.

“However, after operating for over a decade, Kickstarter’s allure had diminished, and it had seen a series of CEO turnovers. By 2021, Kickstarter seemed to offer potential investors nothing but challenges,” reported Fortune.

Insiders note that in the summer of 2021, Kickstarter’s board members engaged venture capitalist Chris Dixon, suggesting a novel investment in Kickstarter, sweetened by the enticing prospect of shifting towards blockchain technology as a key component of the deal. For Dixon, the opportunity to integrate a well-known platform like Kickstarter into the web3 space was an offer he couldn’t refuse.

Sources familiar with the transaction reveal that this secretive funding round amassed $100 million, spearheaded by Andreessen Horowitz (a16z). In gratitude for a16z’s investment, Kickstarter embarked on a mission to reinvent itself as a web3 enterprise. This ambitious plan involved migrating the entire platform to a blockchain known as Celo, a venture also backed by a16z, aiming to function as an open-source protocol, diverging from the conventional proprietary software model typical among tech companies.

Despite these plans, Kickstarter did not transition any part of its platform to blockchain technology. Faced with public backlash, Kickstarter established a community advisory board and eventually chose to pivot away from its blockchain ambitions.

Recently, crypto.news revealed that a16z is nearing the completion of a monumental $6.9 billion fundraising campaign aimed at the artificial intelligence sector, expected to conclude in April 2024. This initiative intends to allocate half of the collected funds to its main investment pool, though specific details regarding the allocation remain undisclosed by the venture capital firm.

source