On September 18, Linda Xie, co-founder and managing director of crypto venture capital company Scalar Capital, announced on social media Deploy new capital. When another co-founder, Jordan Clifford, forwarded the news, he also said that he would return to his family and personal hobbies. According to The Block, Linda and Jordan will also continue in their roles as managing directors while the fund will enter maintenance mode.
This means that Scalar Capital, a crypto fund that has been operating for 6 years, has officially come to an end.
Former Coinbase employees teamed up to launch, a16z is one of the investors
Scalar Capital was co-founded by Linda Xie and Jordan Clifford in 2017. The pair raised $20 million the following year, with backers including a16z partner Chris Dixon, Coinbase co-founder Fred Ehrsam and angel investor Elad Gil. . In the past six years, Scalar has invested in nearly 30 encryption projects, including decentralized social protocol Farcaster, L2 privacy solution Aztec Network, and Web3 music company Sound.
Linda Xie has a high profile within the cryptocurrency and blockchain technology space and is widely regarded as one of the most prominent women in the field. Linda studied economics at the University of California, San Diego in her early years. She worked as a risk management intern at the insurance giant AIG during the summers of her sophomore and junior years. It was this job that first exposed her to the insurance industry in 2011. Bitcoin and has a strong interest in this decentralized system.
In early 2014, the American retail giant Overstock.com reached a cooperation with the American cryptocurrency exchange Coinbase and officially accepted Bitcoin payment. Bitcoin also began to be accepted by more people and entered the mainstream view. Linda therefore decided to join Coinbase. She wrote to Coinbase to apply and was quickly invited. Coinbase invests heavily in regulatory licensing and compliance and also works closely with law enforcement. It follows strict identity verification procedures to comply with regulations such as KYC and AML, and tracks and monitors the transfer of crypto assets. Linda's main job after she first joined Coinbase was to cooperate with law enforcement and help them catch criminals, which prompted her to become interested in the open source privacy project Monero. Later, Linda became a product manager at Coinbase and met Jordan Clifford.
Software engineer Jordan is part of the same team as Linda. He received a bachelor's degree in computer science from Carnegie Mellon University in 2007. He later worked as a business analyst at Capital One for several years and worked in many startups. Finally, in 2016 Joined Coinbase in 2016. When the company was just beginning to experience rapid growth, Linda realized it was the best time to leave Coinbase and start her own business.
Linda wanted to become an investor, want to understand cryptocurrencies more deeply, study new trends in cryptocurrencies, and communicate with smart teams in the industry, so she decided to devote herself full-time. She also considered creating her own project, but because she is passionate about so many different areas of cryptocurrency, she didn’t want to focus on just one area for a long time. It is worth mentioning that Linda’s husband, Will Warren, is the co-founder and CEO of 0x Labs, a DEX infrastructure provider. They support each other in their respective careers, and she has also served as a long-term advisor to 0x.
Scalar Capital’s official website does not disclose its investments. According to incomplete statistics from PANews, its investment projects in the past three years are mainly concentrated in the vertical fields of DeFi, social networking, infrastructure and tools. Its investments in the DeFi track include DeFi derivatives protocol Perennial, fixed-rate lending protocol Element Finance, on-chain structured product Ribbon Finance, DEX aggregation protocol Li.Fi, etc.; social projects include Web3 social platform Lines, decentralized social protocol Farcaster, Merkle Manufactory, the company behind the decentralized social network protocol Farcaster; infrastructure and tool startups include interoperability protocol Connext Labs, L2 privacy solution Aztec Network, DAO voting platform Snapshot Labs, and DAO management tool company Parcel; in addition, Scalar has also invested in NFT projects such as Web3 music company Sound, South African startup NFTfi, and the recently disclosed Web3 marketing company DeForm.
The good days of crypto funds are over, and U.S. regulations make financing more difficult
Under Linda Xie's tweet, investors from crypto VCs such as a16z, Paradigm, Pantera, etc. have left messages expressing their support, which shows her popularity in the crypto circle. Currently, she has not clearly stated her next stop, but she has invested. People are welcome to contact her at any time to support her upcoming projects.
Although the two co-founders did not disclose the reason for suspending Scalar Capital, it is not difficult for them to continue to raise funds and operate funds in the crypto circle with their qualifications and popularity. However, in fact, when the crypto market is still in a bear market, crypto funds are not having an easy time. Against the background of tighter regulations, a bear market in the industry, and the shift of market interest to AI, it has become more difficult for institutions to invest and raise funds.
IOSG founder Jocy said after participating in Token2049, "In an exclusive event held by the Medici family, about half of the 120 people were VCs, and about 90% of the funds in the VCs of these 60 people were financing."
According to a recent report by PANews alone, many well-known institutions claimed that they are raising funds or are about to raise funds for new funds. Paradigm recently stated that it will not give up investment in the encryption field and will raise a US$1 billion fund by the end of the year or early next year; Electric Capital plans Raising US$300 million for its new fund; Mocha Ventures is seeking €30 million in financing for its crypto fund; HashKey Capital is raising funds for its first secondary encryption market fund. These funds will undoubtedly inject energy into the next round of bull market. Head funds are acceptable, but waist funds may not be that easy.
In Jocy’s view, fund financing has become very difficult under the pressure of US regulations. Relying on their brand and influence, they believe that Chinese LPs in Asia will support them more generously. But the reality is different from the bustling scene of the 2049 event. Most Crypto-oriented LPs have become more frugal due to the bear market, while traditional LPs have fallen into skepticism about the value and use case of this industry.
According to a report by Swiss investment consultant 21e6 Capital AG, as of August this year, 97 of the world’s more than 700 cryptocurrency funds have closed. The agency said: “Most fund returns are positive, but in many cases , which is not enough to attract capital.”
Previously, PANews also wrote an article introducing that 10T Holdings ("10T"), a well-known crypto investment institution with three funds under its umbrella, is currently "out of ammunition and food". All its capital has been deployed and can only wait for the next bull market or for the The further opening up of crypto institutional IPOs to enable the exit of previous investments.
Perhaps waiting for the bull market together with 10T, there are more "trapped" crypto funds.
