Startup looks to centralize operations for decentralized organizations
DAOs may be a revolutionary new way of organizing an enterprise, but they still have to get payroll out. Utopia Labs, which just raised $23 million in a Series A fundraising round, is looking to provide back-office support.
Why it matters: Utopia's proposition — payroll and payments for crypto-native organizations, to start — is to centralize operations for these decentralized organizations.
The big picture: DAOs have seen massive growth over the past year as an alternative to C-Corps and LPs. There are an estimated 4,834 such organizations, with roughly $10 billion sitting in DAO treasuries, according to DeepDAO.io, an analytics platform.
- Context: DAOs are member-owned communities that aim to use blockchain, less centralized leadership, to make decisions to achieve a goal.
Details: When Utopia Labs met months ago with SushiSwap, the DAO was manually invoicing for events and other services. Utopia changed that by creating payment request links that Sushi now uses to bill their customers and can have in one place.
- "DAOs have increasingly complex needs in managing their organizations. We're excited to partner with Utopia as they build the operating system for DAOs to streamline their operations," Matt Mizbani, a partner at Paradigm, tells Axios.
- Paradigm, a venture capital shop started in 2018 by Coinbase co-founder Fred Ehrsam and former Sequoia Capital partner Matt Huang, led Utopia's $23 million Series A round.
State of play: Utopia now works with more than 100 DAOs, up from roughly 30 earlier this year.
- Besides SushiSwap, the list includes Friends With Benefits and OlympusDAO, according to Utopia.
- The company is averaging 75% month-over-month growth in payment volume, which in April hit $15 million.
Cofounders Kaito Cunningham, 23, Pryce Adade-Yebesi, 22, Alexander "Alex" Wu, 21 and Jason Chong, 24, too, met online in DAO-fashion.
- "We weren't a DAO, but we had the same ethos," Cunningham, chief of Utopia, tells Axios. "DAOs are an extremely important experiment in human coordination."
- Example: The infamous ConstitutionDAO aimed to collectively buy a copy of the U.S. Constitution, only to be outbid at auction by billionaire Ken Griffin of Citadel.
In the weeds: Other investors in Utopia include Coinbase Ventures, Circle Ventures, and billion dollar HR platform Gusto.
- Utopia Labs declined to comment on its valuation.
Flashback: Utopia announced that they raised $1.5 million from investors led by Kindred Ventures in October.
Bottom line: Utopia Labs' vision to help DAOs with minutiae like payroll points to the future of work.