a16z-Backed Stelo Labs Ceases Operations Today, October 31, 2023
Today marks the cessation of operations for Stelo Labs, in accordance with their earlier announcement on October 17, 2023. The termination affects all Stelo products, including the widely recognized Stelo Chrome extension, which will no longer simulate transactions henceforth. This step has been undertaken to avert the risk of potential phishing attacks on users. The firm had recommended users to transition to alternative secure platforms such as Pocket Universe, Fire, or Wallet Guard.
On February 17, 2023, Stelo Labs, specializing in web3 security, secured $6 million in a seed round spearheaded by Andreessen Horowitz (a16z). Co-founded by Ben Scharfstein and Aman Dhesi, with backgrounds in product management at notable companies like Google, Facebook, and Square, Stelo aims to enhance safety and comprehension in the web3 realm, particularly for Ethereum-based users. They launched the Stelo extension in September, acting as a protective firewall against scams and phishing attacks during transactions, addressing the growing security challenges in the web3 interface and data security, while shifting some responsibility away from the user.
Founded with a mission to simplify the technical and design hurdles around crypto security and usability, Stelo had initially honed in on making transactions both secure and user-friendly. Their journey saw notable achievements including:
* Over 10,000 downloads of the Stelo extension.
* A user base of 1,500 daily active users and 7,000 monthly active users, notwithstanding a cessation in development and marketing over the last six months.
* Protection cover for wallets holding assets over $200 million in value.
* Successful thwarting of hundreds of scam attempts, thereby averting potential financial loss for users.
Their broader vision encompassed the creation of a developer API to facilitate wallet integration with their transaction risk engine, and the development of a universal interface for seamless interaction with any smart contract.
Stelo’s journey brought to light several initial misassumptions, notably regarding the expected data network effect linked to transaction safety, the universal adoption of standalone wallets by crypto users, and the near-term mass adoption of crypto. These insights have underscored the significance of aligning with real-market dynamics and questioning inherent assumptions.
With a return to the drawing board, Stelo Labs is imbibing the lessons from this phase. They emphasize the importance of market definition, validation of assumptions, and a strong focus on solving core user problems. While the current chapter concludes today, Stelo Labs has expressed its intention to unveil their next venture soon, driven by the learnings acquired thus far.
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