stan funding: General Catalyst leads a $2.5 million funding round in Stan, its first Web3 bet in India

Mumbai: Even at the seed stage, General Catalyst had to fight about four condition sheets to land a $2.5 million round in startup Web3 Stan, says Anand Chandrasekaran, partner at the US-based venture capital fund. -United.

This investment marks General Catalyst’s first investment – among many, he says – in India’s Web3 and crypto sector at a time when the region has attracted large and small native and traditional crypto capital locally and of the whole world. This unprecedented interest has seen Web3 startups in India raise over $900 million this year.

How you define “investing in India” is a gray area when it comes to Web3 startups, as more and more founders move or set up entities in friendlier geographies like Singapore and Dubai. However, Chandrasekaran says capital is flowing to Indian teams.

“Most of the employees and teams are still very largely based in India. And so, from a job creation perspective, founders making great products in India are very real,” Chandrasekaran said in an interview with ET.

General Catalyst, which has backed tech companies like Stripe, Snap and Airbnb, will back Web3 founders from start to finish with its recent $4.6 billion raise across three funds. The fund has a greater focus on India as it seeks to strengthen its presence in one of the biggest emerging markets, ET reported on March 31.

Better Capital also participated in the round of Stan, a Web3 esports fan engagement platform founded by

Chadha (who previously co-founded and ran eWar Games) and Akshat Rathee. The two are joined by angel investors from Coinbase Ventures, OpenSea, Kaleyra, among others. Stan is an esports fan engagement platform that leverages digital collectibles and non-fungible tokens.

Chandrasekaran oversees the fund’s web3 strategy in the region with Managing Director Niko Bonatsos.

“As we’re building a practice in India, one of the areas we’ve spent a lot of time in is actually building web3 and crypto startups for the global category, like business-to-business software as a service,” said Chandrasekaran.

He added that they have a thesis on supporting Gen-Z founders in building products for themselves, which Stan also does, “where Gen-Z and Web2 products and entrepreneurial talent choose to focus on creating amazing Web3 product experiences,” he wrote in a blog post.

“We’ve been big supporters of the thesis (of supporting Gen Z founders). It also happens in Silicon Valley, where some of the best products were created because the founders wanted to create something for themselves and their friends. It’s happening in Web3, and it’s happening in India, which has one of the largest populations of young people,” he said.

General Catalyst will support projects across decentralized finance, layer one infrastructure, developer tools, and payments, among others. Globally, he has made several Web3 bets, including Circle Internet Financial, the company behind the USDC stablecoin, which was last valued at $9 billion.

It enters India at a time when VCs like Coinbase Ventures, FTX Ventures, Jump Capital, Andreessen Horowitz, and mainstream institutions like Sequoia Capital India and Lightspeed are aggressively backing early-stage Web3 founders. Of the 28 early-stage deals as of April 30 this year, 24 were early-stage, according to Venture Intelligence.

Chandrasekaran said they have decided to operate as a global fund as opposed to a fund based on each geography, and this will be one of the differentiators for them in the competition.

“I think the big differentiator besides the whole business approach is that, I think at the beginning, more than capital, you need people who believe in the founders, so since I’ve done very early stage investments and angel deals in India, for more than seven years we have been bringing this early believer mindset to support these companies,” he said.

Chandrasekaran is an angel investor in startups like Mudrex, Dealshare, NoBroker, among others.

Regarding macroeconomic factors such as the Russian-Ukrainian conflict and other economic headwinds, which have hit valuations and caused a liquidity crunch, Chandrasekaran said now is the perfect time to start businesses.

“Times like these cause both founders and tourism investors to leave, and luckily for us, innovation doesn’t stop at a downturn. And so it’s actually, I think, an exciting time for building great companies,” he said.