Crypto.com, a popular cryptocurrency exchange, has expanded the size of its venture capital fund to $500 million as it seeks to more aggressively back early-stage startups to help the fledgling ecosystem grow , following similar moves by rivals Binance, Coinbase and FTX.
Crypto.com Capital’s expansion comes less than a year after the Singapore-based firm unveiled its first $200 million fund. The fund, unlike those of many of its rivals, has no LP (meaning it is funded entirely by the company’s balance sheet.)
The inaugural fund, whose individual checks can reach $10 million, has so far been deployed to support around 20 startups, including popular play-for-earning game YGG SEA, multi-chain crypto wallet tracker DeBank, cross-chain token infrastructure Efinity and Ethereum scaling solution Matter Labs.
Crypto.com will continue to focus on supporting early-stage startups, Jon Russell, who joined the company as a general partner this month, said in an interview with TechCrunch.
With the fund, Crypto.com is largely focused on gaming, decentralized finance, and startups that innovate cross-chain solutions. But he warned the industry could change and expand, as it has in recent years, into areas “that we don’t know about”, from where the company keeps tabs on everything.
Tuesday’s announcement also illustrates the growing involvement of cryptocurrency exchanges as a rainmaker – and beneficiary – of the ecosystem encompassing the industry in which they operate in a way that is not so common. in the world of Web2 they are trying to disrupt and innovate at the top. of.
FTX, which has backed more than 15 startups, announced a $2 billion fund last week. Its founder, Sam Bankman-Fried, also owns Alameda Research, a venture capital firm that has backed nearly 100 web3 startups.
Coinbase Ventures, the investment arm of the only publicly traded crypto exchange, and Binance, the world’s largest cryptocurrency exchange by trading volume, are also among the most prolific investors in the space. Web3.
Funding activity in the space, even though most of the aforementioned names often co-invest in startups, is at an all-time high. VCs invested more than $33 billion in crypto/web3 startups in 2021, more than all previous years combined, Galaxy Digital, another prolific investor in the space, wrote in a recent report.
“Valuations in the crypto/blockchain space were 141% higher than the rest of the venture capital space in the fourth quarter, highlighting a favorable environment for founders and intense competition among investors for deal allocations. “, adds the report.
Dozens of venture capitalists have also raised new funds for their crypto investments. Last year, Andreessen Horowitz added a $2.2 billion crypto fund, Paradigm unveiled a $2.5 billion fund, and Hivemind Capital Partners announced a $1.5 billion fund. Katie Haun, who co-managed a16z’s $2.2 billion crypto fund, left the company to start her own crypto-focused fund.
Russell – a former journalist who previously worked at TechCrunch, The Next Web and The Ken – said Crypto.com supports startups to help the ecosystem grow. “If you’re in the industry, it’s in your interest to help businesses grow in the ecosystem and the ecosystem itself grow,” he said. (It’s worth pointing out that Solana, Avalanche, Polkadot — as well as some of their top investors — also aggressively back startups building applications for native blockchains.)
Crypto.com-backed startups have no obligation to list their tokens on Crypto.com over any of its rivals or offer the exchange any other preferential treatment in the cycle, he said. declared. The exchange team doesn’t have a soft spot for holding companies in the investment arm either, he added.
(What about the career change? “I’ve been curious about crypto for several years but didn’t feel like diving in full time. I like this project because Crypto.com is ambitious but yet it There’s definitely a lot of hype and hot air in crypto and web3 right now, but it’s impossible to ignore the talent that’s pouring into the industry,” he said. declared.)
Crypto.com, which started life as the blog of Professor Matt Blaze (who sold the domain to the crypto exchange, formerly known as Monaco and whose early offers included a credit card), s has been aggressively developed over the past year as it seeks to woo more users. Last year, the Singapore-based company agreed to pay more than $700 million for the naming rights for Staples Center in Los Angeles. The downtown Los Angeles complex was rebranded as Crypto.com Arena for the next 20 years.
The company, which bills itself as the “fastest growing” crypto exchange, said at the time of the announcement that the move was well positioned to bring cryptocurrencies mainstream. The exchange, which processes trade volumes of more than $2.5 billion every day, also teamed up with Hollywood star Matt Damon last year to promote the brand and cryptocurrencies.
An ad featuring Damon equating buying crypto tokens and NFTs with one of the greatest and boldest achievements in human history has gone viral but has also drawn criticism.