Crypto-native venture capital firm Multicoin Capital announced a new fund, its third and largest to date at $430 million.
“As evidenced by our first and second venture funds, some of the best opportunities arise in bear markets,” Tushar Jain, co-founder and managing partner at Multicoin Capital, told TechCrunch. “Valuations are more reasonable; founders are more focused, long-term and motivated; and real users explore projects they are genuinely passionate about.”
It plans to invest anywhere between $500,000 to $25 million in early-stage projects and up to $100 million for later-stage companies.
“While this is our largest venture fund, we deliberately raised this amount to allow us to do what we're best at, which is investing with high conviction, in a hands-on way, at the earliest stages,” Jain said. “Larger funds require more deals or larger check sizes. We find that we're most impactful when we can dedicate real time and thought to projects as partners at the onset.”
The company was founded in May 2017 and has invested in cryptocurrencies, tokens and blockchain companies while managing a venture and hedge fund across both public and private markets. Its portfolio companies include layer-1 blockchains Ethereum and Solana and the second largest crypto exchange globally, FTX, among others.
“After nearly a decade of infrastructure development, crypto is finally moving up the stack,” Kyle Samani, co-founder and managing partner at Multicoin Capital, said to TechCrunch. “It's now possible to compose applications with multiple protocols and build consumer-grade experiences.”
These applications require elegant key management solutions, on-ramps and off-ramps, familiar data structures, snappy response times, search, and so much more, Samani said. “However, those primitives are finally here, and we're excited to deploy capital into the first movers that leverage them to cross the chasm.”
The new fund will focus on a handful of areas in the crypto ecosystem, including web3 infrastructure, decentralized finance (DeFi), decentralized autonomous organization (DAOs) tooling and new business models to collaborate on intellectual property, to name a few.
While there was major growth in both the DeFi and DAO spaces over the past few years, the market has cooled off, though Multicoin Capital believes it will continue to proliferate in the long term.
“In addition to infrastructure maturity, crypto has captured the imagination of the public,” Samani said. “NFTs are now mainstream culture and every brand and social app is trying to figure out what their crypto strategy is. At the same time, creators see crypto as a better, more direct way to engage fans and monetize in a user-aligned way. The culmination of these forces make areas like creator monetization, DAO tooling and new crypto-enabled IP models very attractive.”