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🇺🇸 Wishing everyone a Happy 4th of July Weekend! 🇺🇸

We also want to say congrats to all the members of the Crossover family who signed their new NBA contracts (and team owners who signed new players)! It's been a wild week of free agency, and we look forward to seeing many of you out in Las Vegas while we're out there for a series of tech events and as part of our educational work with the NBA's Players Association (NBPA).


--
Welcome to the 2-Minute Drill -- a curated selection of the week's hottest stories from the world of tech, all in 2 minutes.


As always, shoot me a note to learn more or if you just want to say 👋.

-Noah  


✉️ noah@crossovervc.com
📱 650.468.9543
📸 @crossovervc 

On my whistle...
FIRST DOWN


 
Dynamic Dips Into $7.5M Seed for Web3 Dev Tools
In spite of the bear market digging its claws into the crytpo ecosystem, there has been no shortage of startups raising capital to build the tools and infrastructure that will be necessary to support a blockchain-based future that so many in the tech industry believe will play a defining role in the decades to come. 

This week, the latest startup to raise capital for its picks and shovels approach to Web3 infrastructure is Silicon Valley-based Dynamic, which this week announced $7.5 million in seed stage funding to accelerate the adoption of wallet-based authentication and identity.

One of the biggest challenges preventing wider-spread adoption of blockchain-based applications today is the cumbersome and confusing consumer experience. Educating users on what a wallet is and helping them onboard is difficult enough. But then layer on gating, access lists, identity protocols, multiple wallets, chain-specific wallets, and more, and you've got a user adoption nightmare.

Dynamic is looking to provide Web3 developers with tools to enable them to control all authentication, onboarding, and authorization features from the comfort of their developer dashboard, all via a simple SDK (Software Development Kit). Using this simple SDK, developers of Web3 apps (dApp devs) can enable or disable chains with a single click, manage users, and create new onboarding flows and segmentation. It also layers in features to help protect against risky wallets and block entities flagged by the US Office of Foreign Assets Control (OFAC).

While tourist investors are backing out of their crypto positions, developers are doubling down on building out the infrastructure that will lay the foundation for the future of Web3. Dynamic has been working with Web3 developers to help solve this challenge in the ecosystem, and with this announcement plans to expand access to more developers into a closed beta.

If all goes well, companies like Dynamic will make it so that the average user of applications will have no idea they exist--simply that the apps they use work better and are more secure because of their tooling that is active under the hood.

(more here)

Disclaimer: Crossover is an investor in Chapter One, which is one of the anchor investors in Dynamic.

SECOND DOWN


 
Stepn Steps Carefully as Move-To-Earn Fluctuates
One of the biggest critiques of Web3 projects stems from questions of utility. Other than digital art or complicated financial instruments which have frequently been subject to manipulation and hacks, developers in Web3 have often failed to dedicate similar time and resources into building projects that solve real problems and fully leverage the technical promise of the blockchain or to merge the digital and physical worlds.

One of the more interesting projects has been NFT-based fitness app, Stepn, which has gained popularity and acclaim for its creativity in Web3 circles. Stepn can be thought of in many ways as a cross between fitness app Strava and the popular mobile game Pokemon Go. Users essentially earn crypto tokens for exercising, and can earn real-world returns for things like walking, jogging, and running.

Stepn borrows from GPS-based apps like Strava and Pokemon Go, tracks a user's physical movements, and then rewards them with crypto tokens. The concept is referred to as "move to earn" which is a play on the concept of "play to earn" that was popularized by the game Axie Infinity, which captured headlines with the idea of people earning a living by playing video games (and has since run into quite a few problems sustaining the model and dealing with breaches).

While the concept sounds easy (earn money for getting fit) the gameplay itself is complicated. Users need to purchase NFT sneakers with the tokens, there are multiple classes of tokens, and then there are concepts like boosts where you use tokens to unlock bonuses by upgrading your digital sneakers.

Stepn's ability to blend digital and physical worlds attracted a lot of attention, and the app reports having more than 3 million active users just 6 months after launching. But on the flip-side, the value of its token has fallen 97% since its peak, showing once again the extreme volatility of pricing in these early days of crypto projects.

What remains to be seen is what comes next for Stepn. Clearly the team is onto a creative concept. But managing the complexities of a token-based project with utility and avoiding the pitfalls befallen by so many other X-to-earn concepts will be easier said than done.

(more here)

Bonus Coverage:  Indian "move-to-earn" startup Fitmint also raised a $1.6m seed round of funding this week.

THIRD DOWN


 
Pave Lays Down a Path to $1.6B Valuation for HR Tech
This week San Francisco-based realtime compensation platform Pave announced a new $100 million in Series C funding as it looks to help organizations plan, track, and communicate around employee compensation. This brings the 2019-founded startup's total financing to a reported $163 million and brings the valuation up to $1.6 billion.

Compensation for employment remains one of the most opaque parts of the workforce, and makes it difficult for well-intentioned companies to track and plan for appropriate compensation, and can mask biases for those less well-intentioned (gender, race, age, etc). Pave's software integrates with dozens of hiring and HR systems to enable companies to better benchmark compensation to ensure they are able to recruit and retain talent. This need has become even more acute in today's rapidly shifting workforce that incorporates more remote work and part-time and independent contractor statuses.

The startup reports having 150 employees and more than 2,500 customers. With the funding, it also acquired Advanced-HR from Morgan Stanley, which includes a product suite of compensation data. With the new funding and acquisition, Pave hopes to take the guesswork out of compensation for employers and employees alike and create a world where Pave Founder and CEO Matt Schulman says "every single person in the world knows their value and earns what they deserve."

(more here)

FOURTH DOWN


 
Tomorrow Health Raises $60M for Home-Based Digital Health
Whether we're in a bull or bear market, one thing remains constant: the need for healthcare. And this week the latest digital health startup to raise new funding is NYC-based Tomorrow Health, which announced a new $60 million in Series B round of funding to scale quality home-based care. This brings the 2018-founded company's total reported funding to $92.5 million.

Roughly one in four Americans today requires home-based medical care, which represents $3.1 trillion in healthcare spend (6.3% of all spend) according to JAMA. The problem is that the providers of the services, equipment and supplies to support home-based care is highly fragmented without common standards for quality and reporting. This leads to inflated costs, lower quality care, more readmissions, and more.

Tomorrow health is looking to leverage technology to help reimagine the way home-based care is ordered, delivered, and paid for. The startup offers a fully-integrated solution that manages each step of the home care process from care delivery, prescriptions, insurance, billing, and more. In doing so, it streamlines the processes and removes inefficiencies and errors.

To-date the startup reports more than 300% year over year growth in ARR, and is focused on expanding partnerships with more national and regional health plans. If successful, investors hope it can take a bite out of the $195 billion home-based healthcare market opportunity.

(more here)

EXTRA POINT



Talent in Tech: Zigazoo
Lots has been said and written about the dangers of children and usage of social media. But in today's digital age, how do you leverage the best of what social media brings to the table in the digital age with the protections and security for youngsters?

This is the idea behind NYC-based social media app for kids, Zigazoo. And this week the startup announced a new $17 million in Series A funding at a reported $100 million valuation to help in its efforts to become the social media hub for the youngest of consumers. This brings the 2020-founded startup's total reported funding to $25 million.

Zigazoo focuses on building a social networking platform for kids aged three to 12. As part of the wave of startups expanding into Web3, it has also now added on NFT education. The startup reports having more than a million users, and with the funding hopes to expand further into emerging tech sectors through a kid-friendly lens, such as creator economy, augmented reality, the metaverse, and more.

It's still early and building social networks are notoriously hard. Layer on constraints around security and protections for the most vulnerable, and you've got your hands full. But with parents everywhere looking for safer ways for their children to engage with the digital era, Zigazoo and its investors are willing to make the bet that they can succeed.

Athletes + Entertainers involved include: tennis star Serena Williams and entertainer Jimmy Kimmel as well as the NBA.

(more here)
 

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Disclaimer: The content in this newsletter is for informational purposes only and should NOT be taken as legal, business, tax, or investment advice. It also does NOT constitute an offer or solicitation to purchase any investment or a recommendation to buy or sell a security.



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