Despite recent uncertainties surrounding the crypto industry due to regulatory concerns and a lingering market downturn, Martin El-Khouri, a Senior Director at Bertelsmann Investments, views investment in Web3 as a strategic move for the firm. Speaking at the Proof of Talk conference, El-Khouri articulated the continued interest from venture capital (VC) investors, with European decentralized finance startups observing almost a 120% rise in VC funding in 2022.
Web3, the next generation of the internet integrating blockchain technologies and decentralized systems, remains an attractive prospect for major investment firms like Bertelsmann. With approximately 1.7 billion euros invested across over 400 companies worldwide, Bertelsmann started venturing into Web3 as early as 2016. El-Khouri stressed that the current market state is advantageous to discern between the value-creating and hype-driven projects in the sector.
El-Khouri views investments in Web3 as a “hedge against disruption”. Convincing top-tier leadership in global corporations about the viability of Web3 can be challenging due to the industry’s volatile image. However, he emphasizes that regulatory clarity helps investors evaluate business risks better, facilitating informed decisions.
The spotlight is also shifting towards AI startups and generative artificial intelligence, with the AI market projected to reach $407 billion by 2027, a significant leap from $86.9 billion in 2022. Despite the growing interest in AI, El-Khouri maintains that the importance of blockchain and crypto will continue to rise.
In El-Khouri’s perspective, the major selling points of Web3 are being amplified by advancements in generative AI. As AI content creation gains traction, blockchain technology will be critical in addressing the double-spending problem, acting as an intermediary-free solution while providing provenance to digital assets. His comments underscore the continued faith in Web3 among investment firms, despite the recent turbulence in the crypto market.
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