At Madrona, we back enduring companies with great teams that have massive potential to transform industries. We backed Spice AI in a pre-seed round last fall as they built a developer-first platform that made it easier to integrate AI into applications, particularly when processing time series data. Now, we are excited to partner with co-founders Luke Kim and Phillip LeBlanc on their mission to be a developer-first infrastructure platform for Web3 and to lead the company’s $13.5 million seed round. We are joined in the round by crypto investors, including Blackbird Ventures, Basis Set Ventures, Joe McCann’s new Asymmetric fund, Alumni Ventures Blockchain Fund, and Protocol Labs. Spice.xyz is the company’s platform, which enables developers to access cross-chain data necessary for building Web3 intelligent applications.
Spice AI is at the center of two investment themes for Madrona. We have been investing in companies focused on intelligent applications for almost a decade, and in looking at opportunities in Web3, we believe there is a need for platforms devoted to next-generation infrastructure and data availability. Developers want to build and create intelligent applications – fast and at scale. Data is critical to achieving that goal, and often this data needs to be prepped, cleaned, and tagged. AI/ML models are then trained across these large datasets before they can start to deliver intelligent insights. This is not necessarily the work developers know how to do or even want to do. They want a rapid, iterative development loop to get going within minutes.
This is the Spice AI vision — build an infrastructure and tooling platform that enables developers to build intelligent apps without having to go through the complexity of data engineering.
When Spice AI launched in 2021, we knew this was an opportunity to transform the Web2 world, making it much easier for developers to create intelligent applications with time-series data. Working with Luke and Phillip, we have been very impressed with their customer focus and how they quickly realized that a trove of time-series data was locked in blockchains. While the developer infrastructure for working with this data was very immature or non-existent, there is an incredible amount of developer activity and interest.
This became a perfect application for Spice AI. In Web3, the tax on developers is massive because data is distributed across chains that do not interact with each other seamlessly — or at all. It is a complex effort to pull real-time data from and across chains and then cleanse, combine, inject, and analyze it at scale. Furthermore, this data is constantly growing and changing, so by the time you go through your process of data engineering, your insights are no longer accurate or even relevant.
While most blockchains are public and open, extracting data from them to power apps and ML is painfully difficult. To get meaningful quantities of useful data, developers are forced to build and operate a complex infrastructure that includes blockchain nodes, big data systems, ETL and ML pipelines, data lakes, data warehouses, and query systems. They have to deeply understand virtual-machine logs and the inner workings and state of smart contracts across a broad array of blockchains, scaling layers, and dApps (decentralized applications.) Net of it all is that any company or developer looking to build an application in Web3 needs to stand up its own infrastructure and invest in complex, costly, time-consuming data engineering that is hard to get right.
With their Spice.xyz platform, this is where Spice AI takes the complexity out of the equation by offering developers access to web3 data across chains via SQL over high-performance Apache Arrow APIs. Simply put, Spice does the hard job of plumbing this together so companies can focus on their core business rather than having to do the heavy lifting.
We first invested in the Spice AI team in October 2021 and have been impressed to see how the product, use cases and depth of customer engagement have dramatically increased over time. The company has been capital efficient and is on its way to building a platform that will prove critical to the success of intelligent applications in the Web3 world.
Solid values and culture are also foundational to the team. Having known and interacted with the team for years (prior to Spice AI), we have seen their strength, capability, and drive for excellence. With this new investment, we are excited to scale the team and add key members while remaining true to the core values.
It’s a real privilege to partner with the entire Spice AI team as they march toward the audacious goal of empowering developers to seamlessly add ML to Web3 applications!