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- Blockchain Capital announces two groundbreaking funds totaling $580 million.
- Strategic partners like Visa and PayPal engage with the venture, seeking deeper crypto insights.
- Funds earmarked for sectors including DeFi, CeFi, gaming, and more.
Despite the ongoing crypto bear market, Blockchain Capital’s ambitious venture with two new funds signals a robust faith in the future of digital finance.
A Bold Move Amidst a Bearish Market
In a world where the crypto bear market continually makes headlines, Blockchain Capital’s announcement of two new funds totaling $580 million comes as a bold and optimistic statement. Spencer Bogart, the firm’s general partner, unveiled this news, emphasizing the company’s dedication to furthering the crypto ecosystem.
Diving Deep into the Funds’ Allocation
The two funds—Blockchain Capital’s sixth early-stage fund and its inaugural “opportunity fund”—have been divvied up with two-thirds and one-third of the total investment, respectively. This marks a significant growth from their fifth early-stage fund, which stood at $300 million in June 2021. Despite the increase, Bogart reaffirms the company’s commitment to their core strengths, stating, “This is our bread and butter.”
Strategic Insights and Focus Areas
These newly minted funds are directed towards six pivotal sectors in the crypto realm: decentralized finance (DeFi), centralized finance (CeFi), centralized infrastructure, decentralized infrastructure, gaming, and consumer/social platforms. Bogart opines that venturing into a $2 billion fund would be overly ambitious, given the current investment atmosphere in crypto. The challenge lies in investing such colossal sums with unwavering conviction.
The Role of Strategic Partners
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Interestingly, Blockchain Capital’s limited partners (LPs) comprise two distinct categories. One includes strategic LPs like Visa and PayPal, while the other encompasses long-term committed capital sources such as university endowments, family offices, and sovereign wealth funds. These strategic partners, especially giants like Visa and PayPal, engage not merely for returns but to glean deeper insights into the evolving crypto landscape.
Opportunity Fund: Capitalizing on Missed Ventures
One of the intriguing facets of this announcement is the opportunity fund. This fund has been carved out to invest in promising projects that the firm might have overlooked during their nascent stages. Bogart envisions a flexible deployment of this capital, spanning anywhere between two to five years, contingent upon emerging opportunities.
A Paradigm Shift in Investment Strategy
While Blockchain Capital traditionally played a more passive role in funding rounds, the landscape is shifting. Today, they lead “most” of the rounds, typically committing over half of the funding, determining pricing, drafting term sheets, and even assuming board positions. This strategic move allows the firm greater say in financing, governance, and allocation opportunities.
Blockchain Capital’s recent announcement underscores the unwavering belief in the long-term potential of blockchain startups. While many venture capitalists are diversifying into newer sectors, Bogart firmly states the company’s intent to remain rooted in their core expertise, dismissing any diversions into realms like AI or token trading. This move not only reflects a steadfast commitment to the crypto world but also positions Blockchain Capital as a vanguard in the investment community amidst uncertain market conditions.