Blockchain integration firm helps businesses prepare for Web 3.0

Startup: BlockSpaces

Founders: Gabe Higgins and Rosa Shores

Year founded: 2017

Investors/investment: BlockSpaces, to date, has landed $7.25 million in investment capital. After securing the backing of a few angel investors, Leadout Capital led its first institutional funding round, which attracted support from Mark Pincus, the founder of mobile app company Zynga, known for games such as “Angry Birds,” “Farmville” and “Words With Friends.” Other investors include GTMfund, Tampa-based Druid Ventures and Tony DiBenedetto, one of Tampa’s early tech entrepreneurs — he founded Tribridge and led it for 19 years of incredible growth, selling the firm in 2017 to DXC Technology.

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“We feel really lucky,” Co-founder and CEO Rosa Shores says. “We got participation from San Franciso [investors] as well as some of the most successful entrepreneurs in Tampa. I love our story as far as who’s involved in our backing.”

Business model/niche

BlockSpaces’ mission is to remove the mystery surrounding blockchains and help companies connect to the next-gen digital ledgers, which are a key component of Web 3.0 — a decentralized evolution of the internet that includes innovations such as augmented reality, cryptocurrency and the metaverse. Shores says she and Higgins have operated in the blockchain space since its early days, going back as far as 2012. They saw a need for a blockchain integration platform that would allow enterprise clients to more easily foster connectivity between their legacy, or Web 2.0, applications and Web 3.0 tools and programs.

“We don’t focus on any particular industry or use case,” Shores says. “We feel that blockchain, as the underlying infrastructure of Web 3.0, will impact every industry and any sort of use case in which data needs to be transmitted across the internet. Blockchain becomes the foundational technology that allows that to happen.”

Blockchain essentially transfers control of internet communication from governments and corporations to individual users, and thus there’s a need for an independent, transparent and immutable ledger of transactions, as well as a redundant store of user data.

“When we think about the hacking of data where someone steals an identity,” Shores says, “it’s always because the data is centralized in a single repository that’s easy to be hacked. Blockchain opens the door to what we call self-sovereign identity. Digital identity is able to be secured on the user side, and in a world where blockchain allows individuals to hold their own identity, it’s fairly un-hackable.”

BlockSpaces operates using a software-as-a-service business model, charging a flat fee and then additional fees based on consumption — “how often they’re pinging chains or utilizing chains,” Shores says. The company declines to disclose its revenue, but she says sales have “tripled in the past 12 months.”

Obstacles to market

A sometimes negative public perception that surrounds cryptocurrency is a threat to BlockSpaces, as is what Shores calls “widespread confusion about blockchain.” She says there’s much more to blockchains than cryptocurrency; in fact, Bitcoin and its brethren are simply the “incentive mechanism to participate in a blockchain network.”

The collapse in early November of FTX, the world’s third-largest cryptocurrency exchange, was a setback in terms of optics, Shores says, “but from a technical perspective, there are no concerns whatsoever on our end. Blockchain continues to move on. And I think it depends on which cryptocurrency you're talking about. For example, this doesn't impact Bitcoin in the least, except public sentiment gets dinged anytime something like this happens.”

Shores likens the FTX fiasco to the aftermath of the Lehman Bros. collapse during the financial crisis of the late 2000s.

“We talk to investors, businesses and other folks all the time who see this for what it was, which is a really bad actor,” she says. “It has nothing to do with blockchain or the technology, just a severe lack of corporate controls and complete mismanagement of funds.”

BlockSpaces, headquartered at Embarc Collective in downtown Tampa, has 21 employees and Shores expects an aggressive hiring push in 2023, regardless of a slowdown in the economy. That's courtesy, in part, to how the pandemic affected the global workforce, but also because of another round of capital fundraising expected to close after the first quarter.

“There’s so much talent on the market compared to a year ago,” she says. “There’s so much opportunity for companies that are aggressively building and growing. It’s (not) so much a challenging time; it’s an opportune time.”