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For Emerging Fund Managers

Keep up with these 4 VC Firms focused on crypto and blockchain

It’s difficult to move as fast as the crypto world does.

New projects pop up daily.

Prices rise and drop in an instant.

Even celebrities are throwing their proverbial hats in the ring.

But underlying all of this noise is a venture scene committed to helping crypto builders build — or buidl, depending on which Discord server you’re in.

A few scrolls down, we’ve highlighted:

  • 4 VC firms
  • What they’re about
  • Noteworthy companies they’ve invested in

But first, let’s recap the progress the crypto world has made in the first 3 months of the year.

2022 is off to a hot start

Blockchain firms received $23.8 billion of venture capital funding in 2021.

This year is off to a hot start, too. Here's a few highlights as of late March 2022:

  • US crypto mining company Compute North raised $385 million in capital
  • Blockdaemon closed a $207 million deal
  • The industry has raised a total of $5.6 billion during the first two months of 2022

Crypto — and blockchain technology as a whole — are no longer niche products with interest from a small group of nerds.

The largest companies in the world are now paying attention, building products and hype around their metaverse projects, including Microsoft and Facebook.

Crypto builders are still validating use cases for a global audience. Behind them are ambitious, dedicated investors. We’ve highlighted 4 just down below.

The first VC firm we’ve highlighted is a household name in crypto …

1. Digital Currency Group

"Our goal is to set the professional standard for sustainable, value-creating investment strategies in this new asset class for many years to come."

Barry Silbert is the CEO and founder of New York-based Digital Currency Group. The team works to build the blockchain and bitcoin ecosystem, which they believe drives social and global economic change.

To prove its dedication to digital asset investing, DCG has expanded its investment activity into:

  • funds
  • tokens
  • companies

DCG is building the optimal portfolio by investing in each sector of the digital asset ecosystem, according to their marketing materials.

They believe "bottom-up, fundamental, and top-down quantitative approach to investing" helps them reach their ultimate goal of outperforming Bitcoin every year to compound wealth and offer returns faster.

DCG's subsidiaries include:

  • Genesis: A suite of services for global investors including market makers, institutional lending, prime brokerage services, and more.
  • Grayscale: World's largest digital currency asset manager sponsoring 15 investment products.
  • Coindesk: Leading independent source of news about blockchain research and data.
  • Foundary: Advisory and financing company focused on digital asset staking and mining to provide North American bitcoin miners and manufacturers with crucial resources.
  • Luno: Digital asset exchange and wallet in major and emerging markets.

Digital Currency Group has recently funded Figure Technologies and Circle — two companies that support financial transactions on the blockchain.

2. Coinbase Ventures

"Coinbase Ventures invests in companies building the open financial system."

This San Francisco-based VC firm was founded in 2018 by Coinbase.

It focuses on early-stage deals in the cryptocurrency and blockchain space.

The firm originally started with the goal of helping compelling companies in the crypto and blockchain space flourish, according to their marketing materials.

Here’s two examples: Coinbase Ventures recently invested in Moonwell, a decentralized digital financing startup. They are also newly supporting WalletConnect, which is a developer that aims to make decentralized applications more user-friendly.

Their investments also include:

  • BlockFi: Specializing in crypto investment and wealth management.
  • Dharma: Technology that allows individuals to earn interest from anywhere in the world.
  • Naos: Facilitates crypto-asset borrowing with real-world assets as collateral.
  • CoinTracker: Cryptocurrency portfolio compliance and tracking.

3. Fenbushi Capital

"Fenbushi’s mission is to drive healthy and sustainable growth in the global blockchain ecosystem, and actively works as a long-term strategic partner to its portfolio projects."

Founded in 2015, this VC firm focuses solely on blockchain-based companies. It is Asia's most active blockchain-focused venture capital firm.

Fenbushi invested in more than 60 projects across four continents recently.

Among them is DEFIYIELD, an asset management app secured by Blockchain Security Blockchain.

Fenbushi Capital's portfolio of companies in the Americas includes:

  • ABRA: A platform enabling crypto holders to maximize their crypto assets' potential. Abra's easy-to-use app allows users to buy, sell, trade, and access interest-earning cryptocurrencies.
  • Mythical Games: A next-generation game technology studio with universal economies driven by player ownership.
  • Lukka: Works to solve complex blockchain data and crypto challenges on infrastructure built for the commerce of the future.

Further reading by Fenbushi Capital:

4. NGC Ventures

"NGC Ventures is one of the largest institutional investors of blockchain and distributed ledger technologies, and has been a key contributor to a number of leading blockchain projects."

With Andrea Zhang and Zihao Chen as managing directors, NGC Ventures has 133 blockchain and crypto deals and $400 million under management.

The Singapore-based company was formed in 2017 and is an incubator-investor for cryptocurrency and blockchain projects. This means they take a more hands-on approach to helping founders operate and scale their businesses on a day-to-day basis.

NGC Ventures works to push mass adoption of blockchain and crypto-based companies by providing seed funding to startups in the space.

They've invested in KuCoin, Bitsdaq, and Mainframe in the past.

NGC Venture's recent investments include:

  • Algorand: The world's first permissionless and open-source pure PoS blockchain protocol intended for use in the future of finance.
  • Xanpool: A fiat-gateway software solution that's internationally compliant.
  • Solana: Decentralized blockchain that enables scalable and user-friendly apps.

Early in March 2022, NGC VEntures partnered with IQ Labs, a company intent on unleashing the potential of NFTs to unlock value for digital asset investors.

Join us in building the decentralized future of finance

At Allocations, we want to play a role in the decentralized future of finance.

We imagine a near future where crypto and blockchain underpin the financial services industry, making it easier and more accessible for investors of all backgrounds.

Things like:

  • Faster, frictionless payments
  • More accessible financial products like loans and bank accounts
  • Borderless transactions

If you’re an investor or fund manager that’s working toward this future too, request a demo to see how you can invest in your next SPV with crypto.

Disclaimer: The information provided in this document does not, and is not intended to, constitute legal, tax, investment, or accounting advice; instead, all information, content, and materials available are for general informational or educational purposes only and it represents the personal view of the author. Please consult with your own legal, accounting or tax professionals.