Many newly established crypto venture capital institutions are expanding their territories and injecting new capital and momentum into the market.
Written by: RootData
In recent months, the encryption investment and financing market has been sluggish, and the amount of financing has repeatedly hit new lows. The cumulative financing amount in June was only 507 million US dollars, which is not even as high as the single financing amount of some projects in early 2022. Behind this is that when the market is turbulent, encryption venture capital institutions have adopted conservative and cautious investment strategies, and even suspended investment, trying to adjust their investment strategies when the market becomes clearer.
However, while the overall market is going down, many cutting-edge crypto venture capital institutions have also emerged, providing richer choices for early crypto projects. They go against the trend, help projects grow with a faster investment frequency during the bear market cycle, and bet on 100-fold projects in the next bull market. Under the ebb and flow, encrypted venture capital institutions may also usher in a new round of reshuffle.
In this article, RootData will conduct an inventory of cutting-edge encryption venture capital institutions, and introduce 9 potential cutting-edge venture capital institutions based on the establishment or becoming active in 2022.
Bain Capital Crypto
Bain Capital Crypto, a pioneer in supporting the construction of the next generation of open Internet infrastructure, originally belonged to Bain Capital Ventures (Bain Ventures). On March 8, 2022, Bain Capital Crypto's first Web3 fund completed a fundraising of US$560 million. According to RootData, Bain Capital Crypto has participated in 14 blockchain projects in the past year, including well-known protocols such as Worldcoin, Celestia, and Scroll.
According to its official website, Bain Capital Crypto has three key focuses: technology and economic research, governance design and participation, and cross-stage participation. Therefore, Bain Capital Crypto will deeply participate in the ecosystem of the project it invests in, and provide technical consultation and support for it. At the same time, it will participate in governance through DAO, and use its own capital advantages to provide liquidity for different stages of the ecosystem.
The Bain Capital Crypto team consists of about 10 members, almost equally divided between research scholars and investors. Stefan Cohen and Alex Evans co-lead Bain Capital Crypto. Stefan Cohen has been leading crypto investments since joining Bain Capital in 2016, and is interested in L1, scaling solutions, privacy and other infrastructure, DeFi, and DAO; Alex Evans focuses on early investments in DeFi, blockchain scalability, and privacy technologies.
ABCDE Capital
ABCDE Capital was established in 2022 by Chinese encryption OG BMAN and Huobi co-founder Du Jun, with a fund size of US$400 million. According to RootData data, ABCDE Capital has participated in 10 rounds of investment in the past year, including 5 leading rounds. Including Particle Network, PolyHedra and other well-known projects.
ABCDE advocates the investment logic of "leaves and roots". The leaves represent the solution to the problem of mass adoption, while the root represents the solution to the problem of technological breakthrough. BMAN said that the essence of investment is to seize the dividends of trends, the most important of which are demographic dividends and technological dividends. In terms of technical dividends, he will look at new infrastructure such as various modular stacks, ZK, and Dev infra, as well as various top projects in the ecosystem. In terms of demographic dividend, look at the NFT and transaction user ports that can carry massive adoption.
In addition, ABCDE is optimistic about the resonance of the three cycles of Bitcoin halving, U.S. dollar elections, and the end of interest rate hikes. It is actively planning opportunities in 2024, so it chooses to support some enterprises with very key ecological niches in 2022, and provides them with end-to-end ecological resource support including capital, traffic, transactions, licenses, and developers.
In the core team of ABCDE, BMAN mainly manages investment, and Du Jun is responsible for resource layout. In January 2023, former Amber Group blockchain analyst Lao Bai joined ABCDE Capital as an investment research partner.
dao5
dao5 is an experimental cryptocurrency investment fund founded by former Polychain Capital partner Tekin Salimi. RootData records that the institution has participated in investment 13 times in the past year, and the cumulative number of investment portfolios is 20, including well-known projects such as EigenLayer, Lens Protocol, Berachain, and Story Protocol.
dao5 was founded in 2022 and announced $125 million in funding at the Avalanche Summit conference that same year. Investment sizes range from approximately $500,000 to $2 million for pre-seed and seed-stage deals. Members include Emin Gün Sirer, founder of Avalanche, Do Kwon, founder of Terra, and Ivan Soto-Wright, founder of Moonpay, etc. Currently, the introduction of Do Kwon has been removed from the dao5 official website.
Tekin Salimi plans to turn dao5 into an incubator similar to Y Combinator, a DAO self-owned by project founders. Every time dao5 makes an investment, the founders of its portfolio companies receive arbitrage shares into the DAO. In other words, Salimi and other members of the dao5 investment team were diluted. Over time, this process results in each Portfolio Founder being financially exposed to every other Portfolio Founder’s tokens. The goal of this is to incentivize the founders to cooperate with each other to increase the value of the token together. dao5 aims to create an outstanding alumni network.
Most of the token economics of dao5 are still undecided, Salimi said, and the fund plans to convert to a DAO in about three years or when at least 70% of its capital has been deployed. Furthermore, the DAO's token will only have value if the fund is profitable.
No Limit Holdings
No Limit Holdings is one of the institutions with the highest frequency in the lineup of participating institutions recently. RootData records that the institution has publicly participated in 8 rounds in the past four months. The official website shows that the cumulative number of investment portfolios is 21, including well-known projects such as Binance.US, Connext, Sei, and Odsy.
According to the official website, No Limit Holdings was established in April 2022 and completed the first delivery of a US$100 million fund jointly raised with private equity giant ClearVue Partners in July of that year. In a press release issued in December last year, the agency stated that its funds will be used in seed rounds and strategic rounds, with investment sizes ranging from $250,000 to $3 million and investing in at least 13 encryption companies.
ClearVue Partners is a Chinese private equity firm founded in 2012 with over US$1 billion in assets under management. The official website press release stated that the name No Limit is a tribute to a poker game in 2010, in which the heads of ClearVue Partners and No Limit Holdings began their cryptocurrency journey.
In terms of team background, the two partners of No Limit Holdings both have a working background in Binance. Its founder partner Gin Chao served as the head of Binance strategy from 2018 to 2022, responsible for leading corporate development, venture capital and legal departments. Another partner, Anatoly Kondiyakov, once served as the head of institutional sales and VIP in the Asia-Pacific region. Partner Malcolm Shu was previously the co-founder and managing partner of the fast-casual restaurant chain Sproutworks, and also worked in financial institutions such as North Sound Capital and Lehman Brothers.
Arcane Group
Arcane Group is a stage venture capital firm supporting the next generation of Web3 entrepreneurs, headquartered in Singapore. RootData records that Arcane Group has accumulated 20 investment portfolios in the encryption field, and has participated in 8 investment rounds this year. Representative investment projects include Animoca Brands, PolyHedra, Particle Network, etc.
In terms of team, Neo Su, founding partner of Arcane Group, used to be the investment director of private equity firm Bond Capital Partners, and partner Evans Huangfu was the head of Huobi Ventures.
The agency has fewer public PRs, and a few reports show that in May this year, the full-chain interoperability infrastructure MAP Protocol announced the establishment of a $10 million ecological fund with Waterdrip Capital and Arcane Group.
Builder Capital
Builder Capital is a venture capital fund that supports and incubates web3 builders. It has been active in the crypto venture capital market since early 2022. The number of investment portfolios recorded by RootData is 19, and the number of investment rounds since this year is 8. Representative investment projects include Thala, Oasys, dYmension, Eclipse, etc.
In terms of investment strategy, Builder Capital's main investment directions are infrastructure (47%), DeFi (26%), etc. Most of them are seed rounds or pre-seed rounds, and the round size is mostly below $5 million. The agency also has Builder Labs, which helps web3 projects enhance their internal marketing, business development and recruitment processes.
Lingfeng Innovation Fund (LIF)
LIF is the sister fund of Lingfeng Capital, a $400 million fintech start-up fund that has invested in fintech unicorn projects such as JD Technology and 4Paradigm. LIF focuses on early stage projects, from pre-seed to Series A stage. According to RootData, the first phase of LIF aims to raise 30 million US dollars, and has completed 20 million US dollars of fundraising, and has invested in 13 blockchain projects such as ApolloX, Yuliverse, and Web3Go.
LIF adheres to the investment logic of "ABC" Narrative: "A" refers to Access (entrance), "B" refers to Better Blockchain (better blockchain), and "C" refers to Content (content). The projects that LIF has invested in cover data, security, Layer one and multi-chain cross-chain, oracle, decentralized storage and other directions. Its founding partner Nicole Zhang said in an interview that LIF is not obsessed with specific subdivision tracks, as long as the project can prove innovative.
Nicole Zhang is the former executive director of Binance Labs. She has worked on Web3 investment for more than two years. Half of LIF's investment at this stage is jointly invested with Zhang's former colleagues. Compared with working at Binance Labs, Nicole Zhang believes that her investment logic is more flexible at this stage, and she can participate in projects at various stages, and even incubate very early projects.
LIF holds a Singapore capital market service license, Nicole Zhang is responsible for financing and due diligence, and the founding partners of Lingfeng Capital, Ning Ma and Ming Shu, are also the founding partners of LIF. Limited partners (LPs) include big names such as cryptocurrency security firm CertiK and Singapore family office Kamet Capital Partners.
Spaceship DAO
SpaceshipDAO is a global group of cryptocurrency natives, founders, builders, and investors to discover and invest in early-stage projects in DeFi, NFT, staking, re-staking, privacy, and Web3 social. According to RootData data, SpaceshipDAO has participated in 12 investments in the past year, and the number of investment portfolios has reached 22, including well-known projects such as Lens Protocol, EigenLayer, and Argus.
SpaceshipDAO was established in 2022. The organization gains legality in the United States, and new members need to pass their expertise and old members vote to join. According to the official website, SpaceshipDAO currently has 58 members, and the number of ETH contributions is 2,558.4.
SpaceshipDAO’s investment process utilizes the blockchain to achieve a fair mechanism: members conduct an initial poll to determine whether the project is vibrant, followed by a deeper due diligence, which may involve: trial products, follow-up communication with the project team, etc. Finally, after the evaluation reached a consensus, SpaceshipDAO voted on the proposal on the chain. If the yes votes outnumber the no votes, the DAO agrees to commit funds.
Geometry
Geometry is a research and investment firm focused on zero-knowledge privacy technologies, backed by hedge fund billionaire Alan Howard. According to RootData, Geometry has invested in 13 blockchain projects, well-known projects include Scroll, RISC Zero, MARA, etc.
The co-founder of Geometry, Tom Walton-Pocock, was the co-founder and CEO of Aztec Network. He said that the goal of Geometry is to help founders with technical backgrounds transform technology into products with commercial value. In addition to zero-knowledge proof and cryptography, Tom Walton-Pocock also said in an interview that AI and virtual reality (VR) have a very important impact on the investment value of cryptocurrencies.
Geometry also offers fellowships in deep technology, and its team, in addition to Tom Walton-Pocock, is Geometry's founding research lead Kobi Gurkan, who is also the research lead of ZKhack and ZKvalidator. Gregoire le Jeune is Fund Manager at Geometry.
summary
In addition to the aforementioned institutions, there are a number of newly established institutions that have recently raised funds or have strong backgrounds despite the small number of investments, and are still worthy of attention, including Generative Ventures (initiated by BAI Capital Partners), Breed VC (raised US$20 million at the beginning of the year), Comma3 Ventures (raised US$20 million in May), Hash3 (raised US$29 million in June), gmjp (Japanese encryption venture capital fund), Nom ad Capital (Binance Investment), etc.
