RootData: 10 Emerging Crypto Venture Capital Firms Not to Be Missed in a Bear Market
Many newly established crypto venture capital firms are expanding their territories, injecting new funds and momentum into the market.Author: RootData
In recent months, the crypto investment and financing market has been sluggish, with financing amounts hitting new lows. The cumulative financing amount in June was only $507 million, which is even less than the single financing amounts of some projects at the beginning of 2022. Behind this is the fact that, amidst market fluctuations, crypto venture capital firms have adopted conservative and cautious investment strategies, even pausing investments, in an attempt to readjust their strategies when the market becomes clearer.
However, while the overall market is declining, many emerging crypto venture capital firms have also emerged, providing richer options for early-stage crypto projects. They are going against the trend, helping projects grow with a faster investment frequency during the bear market, betting on hundredfold projects for the next bull market. In this ebb and flow, crypto venture capital firms may also face a new round of reshuffling.
In this article, RootData will review emerging crypto venture capital firms established or becoming active in 2022, introducing 10 promising new venture capital firms.
Bain Capital Crypto supports pioneers building the next generation of open internet infrastructure and originally belonged to Bain Capital Ventures. On March 8, 2022, Bain Capital Crypto's first Web3 fund completed fundraising of $560 million. According to RootData, Bain Capital Crypto has participated in 14 blockchain projects in the past year, including well-known protocols like 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 involvement. Therefore, Bain Capital Crypto will deeply engage with the ecosystems of the projects it invests in, providing technical consulting and support, participating in governance through DAOs, and leveraging its capital advantages to provide liquidity at different stages of the ecosystem.
The Bain Capital Crypto team consists of about 10 members, with researchers and investors almost equally represented. Stefan Cohen and Alex Evans co-lead Bain Capital Crypto. Since joining Bain Capital in 2016, Stefan Cohen has been leading crypto investments, focusing on infrastructure related to L1, scaling solutions, privacy, as well as DeFi and DAOs; Alex Evans focuses on early investments in DeFi, blockchain scalability, and privacy technologies.
ABCDE Capital was established in 2022, co-founded by Chinese crypto OG BMAN and Huobi co-founder Du Jun, with a fund size of $400 million. According to RootData, ABCDE Capital has participated in 10 rounds of investment in the past year, leading 5 of those rounds, including well-known projects like Particle Network and PolyHedra.
ABCDE advocates an investment logic of "leaves and roots," where leaves represent solutions to problems of mass adoption, and roots represent solutions to technological breakthroughs. BMAN states that the essence of investment is to capture the dividends of trends, with the most important being demographic dividends and technological dividends. In terms of technological dividends, he looks at various modular stacks, ZK, Dev infra, and leading projects within various ecosystems. For demographic dividends, he focuses on NFTs and trading user interfaces that can support massive adoption.
Additionally, ABCDE is optimistic about the resonance of three cycles: Bitcoin halving, the US elections, and the end of interest rate hikes, and is actively positioning itself for opportunities in 2024 by supporting key ecosystem companies in 2022, providing end-to-end support including capital, traffic, trading, licenses, and developer resources.
In the core team of ABCDE, BMAN primarily manages investments, while Du Jun is responsible for resource allocation. In January 2023, former Amber Group blockchain analyst Lao Bai joined ABCDE Capital as a partner in investment research.
dao5 is an experimental cryptocurrency investment fund founded by former Polychain Capital partner Tekin Salimi. RootData records that the institution has participated in 13 rounds of investment in the past year, with a total portfolio of 20 projects, including well-known projects like EigenLayer, Lens Protocol, Berachain, and Story Protocol.
dao5 was established in 2022 and announced at the Avalanche Summit conference that year that it had secured $125 million in funding. The investment scale ranges from $500,000 to $2 million, focusing on pre-seed and seed stage transactions. Members include Avalanche founder Emin Gün Sirer, Terra founder Do Kwon, and Moonpay founder Ivan Soto-Wright, although Do Kwon's introduction has since been removed from the dao5 website.
Tekin Salimi plans to transform dao5 into an incubator similar to Y Combinator, a DAO owned by project founders. Each time dao5 makes an investment, the founders of the portfolio companies receive arbitrage shares to enter the DAO. In other words, Salimi and other members of the dao5 investment team are diluted. Over time, this process will create economic risks for each portfolio founder regarding the tokens of every other portfolio founder. The goal is to incentivize founders to collaborate and collectively enhance the value of the tokens. dao5 aims to build an outstanding alumni network.
Salimi states that most of the token economics for dao5 are still undetermined, and the fund plans to convert to a DAO after about three years or once at least 70% of the capital has been deployed. Furthermore, the DAO's tokens will only have value when the fund is profitable.
No Limit Holdings is one of the most frequently appearing institutions in the investment landscape recently. RootData records that the institution has publicly participated in 8 rounds of investment in the past four months, with its official website showing a total portfolio of 21 projects, including well-known projects like Binance.US, Connext, Sei, and Odsy.
According to official information, No Limit Holdings was established in April 2022 and completed the first closing of a $100 million fund raised in collaboration with private equity giant ClearVue Partners in July of the same year. In a press release last December, the institution stated that its funds would be used for seed rounds and strategic rounds, with investment sizes ranging from $250,000 to $3 million, targeting at least 13 crypto companies.
ClearVue Partners is a Chinese private equity firm established in 2012, with assets under management exceeding $1 billion. The press release from No Limit states that the name "No Limit" is a tribute to a poker game from 2010, where the leaders of ClearVue Partners and No Limit Holdings began their cryptocurrency journey.
In terms of team background, both partners at No Limit Holdings have backgrounds working at Binance. The founding partner Gin Chao served as the head of strategy at Binance from 2018 to 2022, leading corporate development, venture capital, and legal departments, and previously held positions as Vice President of Strategy and Corporate Development at the NBA and as a strategic executive at Dell. Another partner, Anatoly Kondiyakov, served as the head of institutional sales and VIP in the Asia-Pacific region, while partner Malcolm Shu was a co-founder and managing partner of the fast-casual restaurant chain Sproutworks and has also worked at financial institutions such as North Sound Capital and Lehman Brothers.
IOBC Capital is a venture capital firm focused on investments across the entire spectrum of the crypto primary market, including Web3 underlying infrastructure, Layer 2, DeFi, GameFi, DAOs, and the metaverse, with offices in Singapore, London, Hong Kong, and Silicon Valley. According to RootData, IOBC Capital currently has a portfolio of 13 companies and has disclosed investments in 4 projects in the past four months, with representative investments including Sei Network, LayerZero, and RISC Zero.
In June 2022, IOBC Capital officially launched its first venture capital fund with a size of $50 million. Partner Alva Xu stated that the fund will focus on opportunities in the Web3 infrastructure layer, component layer, and middleware layer. The fund is divided into direct investment and FOF (fund of funds) segments and has already invested in several top crypto venture capitals.
In terms of specific investment strategies, IOBC Capital prefers to invest in early-stage projects, with more than half of its investment rounds being in the tens of millions of dollars range. Additionally, IOBC Capital is known for its in-depth project and industry research reports.
Arcane Group is a stage venture capital firm that supports the next generation of entrepreneurs in Web3, headquartered in Singapore. RootData records that Arcane Group has a cumulative portfolio of 20 projects in the crypto space, with 8 investment rounds this year, including representative investments like Animoca Brands, PolyHedra, and Particle Network.
In terms of team background, Arcane Group founding partner Neo Su previously served as the investment director at private equity firm Bond Capital Partners, while partner Evans Huangfu was the head of Huobi Ventures.
The institution has limited public PR, and a few reports indicate that in May of this year, the cross-chain interoperability infrastructure MAP Protocol announced the establishment of a $10 million ecological fund in collaboration with Waterdrip Capital and Arcane Group.
Builder Capital is a venture capital fund that supports and incubates web3 builders, becoming active in the crypto venture capital market in early 2022. RootData records a portfolio of 19 projects, with 8 investment rounds this year, including representative investments like Thala, Oasys, dYmension, and Eclipse.
In terms of investment strategy, Builder Capital primarily focuses on infrastructure (47%) and DeFi (26%), with the vast majority being seed or pre-seed rounds, typically under $5 million in size. The institution also has Builder Labs to help web3 projects enhance their internal marketing, business development, and recruitment processes.
Lingfeng Innovation Fund (LIF)
LIF is a sister fund of Lingfeng Capital, which is a $400 million fintech startup fund that has invested in fintech unicorns like JD Technology and Fourth Paradigm. LIF focuses on early-stage projects, from pre-seed to Series A. According to RootData, LIF's first fundraising target is $30 million, and it has currently completed $20 million in fundraising, investing in 13 blockchain projects including ApolloX, Yuliverse, and Web3Go.
LIF adheres to the "ABC" Narrative investment logic: "A" stands for Access, "B" is Better Blockchain, and "C" is Content. The projects LIF has invested in cover areas such as data, security, Layer 1, multi-chain cross-chain, oracles, and decentralized storage. Its founding partner Nicole Zhang stated in an interview that LIF does not get hung up on specific sub-sectors as long as the project can demonstrate innovation.
Nicole Zhang is a former executive director at Binance Labs, where she worked in Web3 investments for over two years. Currently, half of LIF's investments are made in collaboration with Zhang's former colleagues. Compared to her time at Binance Labs, Nicole Zhang believes her investment logic is more flexible now, allowing her to participate in projects at various stages, even incubating very early-stage projects.
LIF holds a capital market services license in Singapore, with Nicole Zhang responsible for fundraising and due diligence. Lingfeng Capital's founding partners Ning Ma and Ming Shu are also founding partners of LIF. Limited partners (LPs) include well-known companies such as crypto security firm CertiK and Singapore family office Kamet Capital Partners.
SpaceshipDAO is a global community composed of cryptocurrency natives, founders, builders, and investors, aimed at discovering and investing in early projects in DeFi, NFTs, staking, re-staking, privacy, and Web3 social. According to RootData, SpaceshipDAO has participated in 12 rounds of investment in the past year, with a portfolio of 22 projects, including well-known projects like Lens Protocol, EigenLayer, and Argus.
SpaceshipDAO was established in 2022 and has gained legitimacy in the United States. New members must be voted in by existing members based on their expertise. According to the official website, SpaceshipDAO currently has 58 members, with a total ETH contribution of 2,558.4 ETH.
The investment process of SpaceshipDAO utilizes blockchain to achieve a fair mechanism: members conduct an initial poll to assess whether a project is vibrant, followed by deeper due diligence, which may involve product trials and follow-up communications with the project team. Finally, after reaching a consensus on the evaluation, SpaceshipDAO will conduct an on-chain vote on the proposal. If the votes in favor exceed those against, the DAO agrees to invest funds.
Geometry is a research and investment company focused on zero-knowledge privacy technology, supported by hedge fund billionaire Alan Howard. According to RootData, Geometry has invested in 13 blockchain projects, including well-known projects like Scroll, RISC Zero, and MARA.
Geometry's co-founder Tom Walton-Pocock was a co-founder and CEO of Aztec Network. He stated that Geometry's goal is to help technically skilled founders turn technology into commercially viable products. In addition to zero-knowledge proofs and cryptography, Tom Walton-Pocock mentioned in an interview that AI and virtual reality (VR) have a significant impact on the investment value of cryptocurrencies.
Geometry also offers deep technical scholarships, and its team includes Kobi Gurkan as the founding research lead, who is also the research lead for ZKhack and ZKvalidator. Gregoire le Jeune serves as the fund manager for Geometry.
Summary
In addition to the aforementioned institutions, several newly established firms, although not having many investments, have recently raised funds or have strong backgrounds, and are still worth paying attention to, including Generative Ventures (initiated by a partner of BAI Capital), Breed VC (raised $20 million at the beginning of the year), Comma3 Ventures (raised $20 million in May), Hash3 (raised $29 million in June), gmjp (a Japanese crypto venture fund), and Nomad Capital (invested by Binance), among others.
Venture capital firms are one of the main players in the crypto market. With a rich database of investment and financing, RootData will also release a series of analytical articles on crypto VCs, so stay tuned.
