Investing in the next wave of innovative crypto companies and protocols by Samuel Harrison | @blockchain | Dec, 2020

We started Blockchain.com Ventures (BCV) in July 2018. Back then, the crypto ecosystem was suffering as a result of the initial boom of coin offering (ICO) 2017. Bitcoin was trading at around $ 6,500 and investor enthusiasm to the sector is limited. A mix of negative price action, outright scams and the lack of standard investor protective provisions in the typical ICO left a crypto reputation badly damaged. But under that maze, the speed of innovation and promise of blockchain technology was at an all-time high, as projects continued to build and push forward.

As the next wave of innovative companies and protocols breaks out, the BCV team has the sole function of identifying and supporting promising projects. The particular focus of the sector allows us to remain committed to the technology and our portfolio, as we have observed VC’s general appetite for the ebb and flow and the Bitcoin price fluctuations over the years.

We believe that the projects we support all use distributed ledger technology to provide real utility to consumers and businesses, and as a result, will capture value and generate positive financial returns for investors. To date, we have examined over 1,000 deals and chosen to support 16 projects, through token and equity investments. The deals have given us various locations across the industry, from content supply networks, to DeFi money markets, to algorithmic market making.

Sample of recent investments:

  • Aave ($ AAVE) – Devolved lending protocol
  • Theta ($ THETA) – A decentralized content delivery network
  • Wintermute – Crypto native algorithmic market maker
  • Republic of – Leading fundraising platform
  • CoinMe – On-ramp platform and crypto payment
  • GER Protocol ($ GER) – A sharded, PoS blockchain platform built with developers in mind
  • Amber – Prime brokerage and gateway to Asian crypto markets
  • Blockdaemon – Enterprise infrastructure provider and developer
  • Enjin ($ ENJ) – A leading blockchain gaming platform
  • DappRadar – Discovery platform for blockchain dApps and DeFi

Blockchain Ventures is structured to provide maximum value to our investors (LP), in the form of financial returns, as well as to the projects we fund, in the form of executive 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.

Because the fund has taken significant levels of external capital, BCV operates solely on the mandate of financial returns and aims to provide a meaningful, positive outcome for LPs. That is our only objective and has shown early signs of success – the Multiple Investment Capital Fund (MOIC) is currently ~ 3x, 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 technological, security and regulatory talent that comes with being one of the largest and most visited blockchain companies in the world. We make investment decisions as informed executives but with a laser focus on financial returns. Once invested, we can use our operator skill set to provide real portfolio support.

For example:

  • We are node operators, and were the first external verifier for the Theta network.
  • We are able to integrate other products and functionality from our portfolio into our own platform. We display DeFi data from DappRadar, offering distribution to millions of blockchain users.
  • We have a team of regulatory experts who can help our portfolio companies navigate the crazy regulatory landscape.
  • Our security engineers have dealt with crypto custody for billions of dollars for almost a decade now.
  • 3 of the 4 most recent tickets we have listed on our exchange have been BCV portfolio companies, given our close knowledge of their products and our relationship with the teams

Uniquely, more than 10 Blockchain.com individual employees are invested in the fund. We are proud of this fact as it aligns incentives between Blockchain.com’s technology, legal, compliance and market experts with the fund’s other external LP experts.

To learn more about Ventchain.com Ventures, visit https://www.blockchain.com/ventures

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