Investing in the next wave of groundbreaking crypto companies and protocols
December 17th, 2020
We started Blockchain.com Ventures (BCV) in July 2018. Back then, the crypto ecosystem was suffering from the fallout of the 2017 initial coin offering (ICO) boom. Bitcoin was trading at around $6,500 and investor enthusiasm towards the sector was limited. A mix of negative price action, outright scams, and a lack of standard investor protective provisions in the typical ICO left crypto’s reputation badly damaged. But under that haze, the pace of innovation and promise of blockchain technology were both at an all-time high, as projects continued to relentlessly build and push forward.
As the next wave of groundbreaking blockchain companies and protocols emerge, the BCV team has the sole function of identifying and supporting promising projects. The dedicated sector focus enables us to stay committed to the technology and our portfolio, as we’ve observed generalist VC appetite for the sector ebb and flow along with Bitcoin price fluctuations over the years.
We believe that the projects we support are all using distributed ledger technology to provide real utility to consumers and businesses, and as a result, will capture the value and generate positive financial returns for investors. To date, we’ve explored over 1,000 deals and chosen to back 16 projects, via both token and equity investments. The deals have given us diverse placement across the industry, from content delivery networks to DeFi money markets, to algorithmic market making.
A sample of recent investments:
- Aave ($AAVE) — A decentralized lending protocol
- Theta ($THETA) — A decentralized content delivery network
- Wintermute — A crypto native algorithmic market maker
- Republic — A leading fundraising platform
- CoinMe — Crypto on-ramp and remittance platform
- NEAR Protocol ($NEAR) — A sharded, PoS blockchain platform built with developers in mind
- Amber — Prime brokerage and gateway to Asia crypto markets
- Blockdaemon — Enterprise and developer infrastructure provider
- Enjin ($ENJ) — Leading blockchain gaming platform
- DappRadar — A discovery platform for blockchain dApps and DeFi
Blockchain Ventures has been structured to provide maximum value to both our investors (LPs), in the form of financial return, as well as to the projects we finance, in the form of operational support. The fund’s anchor LP is Lightspeed Venture Partners, with support from Hutt Capital, Rockaway Blockchain, Hard Yaka, Blockchain Coinvestors and Keiretsu Capital Blockchain. Individuals such as Roger Ver (Bitcoin.com), Kevin Lin (Twitch) and Steve Chen (YouTube) also participated.
As the fund has taken significant levels of outside capital, BCV operates on a purely financial return mandate and aims to provide a meaningfully positive outcome for LPs. That is our sole objective and has shown early signs of success — the fund Multiple of Invested Capital (MOIC) is ~3x at present, after 18 months of investment operations.
However, the fund is a hybrid, given that it is also part of a large horizontal blockchain platform, Blockchain.com. The benefit of the hybrid structure is that the fund has access to the tech, security, and regulatory talent that comes with being one of the world’s largest and most visited blockchain companies. We make investment decisions as knowledgeable operators but with a laser focus on financial return. Post-investment, we’re able to use our operator skillset to provide real portfolio support.
- We’re node operators and were the first external validator for the Theta network.
- We are able to integrate products and other functionality from our portfolio onto our own platform. We display DeFi data from DappRadar, offering distribution to millions of blockchain users.
- We have a team of regulatory experts that are able to help our portfolio companies navigate the murky regulatory landscape.
- Our security engineers have handled crypto custody for billions of dollars for almost a decade now.
- 3 of the 4 most recent tokens we’ve listed on our exchange have been BCV portfolio companies, given our intimate knowledge of their products and relationship with the teams
Uniquely, more than 10 individual Blockchain.com employees are invested in the fund. We’re proud of this fact as it aligns incentives between Blockchain.com’s tech, legal, compliance, and markets experts with those of the other external LPs of the fund.
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