As capital continues to deploy the crypto economy, another big fund is entering the space.
Seven-year-old CoinFund is launching a $300 million early-stage web3 venture fund, CoinFund Ventures I, which is backed by institutional investors, family offices and crypto-native founders.
“We started in 2015 and have invested in more than 100 portfolio companies since then,” David Pakman, managing partner and head of venture investing at CoinFund, said to TechCrunch.
The firm is one of the longest running web3 venture capitalists and has invested an estimated $1 billion in seed stage startups, the firm said in a release.
The new fund will invest in crypto projects and companies that focus on layer-1 blockchains, web3 infrastructure, DeFi, NFTs and gaming, payments, asset management, exchanges, marketplaces and decentralized applications, Pakman said. The capital will be deployed over a two to three year period, he added.
Even though the market might not be as bullish as it was last year, Pakman isn’t worried.
“ We are long-term investors and believe that crypto and web3 offer the largest areas for enterprise value creation in the entire tech industry today,” Pakman commented. “This view is independent of current market conditions. We try not to time markets, and instead invest over long periods of time.”
Pakman thinks the recent drawdown in crypto asset prices generally provides more favorable entry prices for venture capital funds like CoinFund, but the transition from Web 2.0 to web3 is in its early stages. “We think cryptonative investing teams like ours have a distinct advantage in the market today in understanding the direction and long-term opportunity set in web3.”
Even in this bearish crypto market, there’s more evidence of consumer and institutional adoption than previous cycles, Pakman commented.
“NFTs, for instance, generated more than $30B of sales in the first two years of their existence, making them, we believe, the most successful new consumer product introduced since the smartphone,” Pakman said. “These products could only have been built atop blockchains and show strong consumer interest in crypto-based products.”
Through the new fund, CoinFund will aim to continue investing and building crypto companies that align with the “giant landscape web3 entails,” Pakman said.
“This focus creates a ‘clean slate’ investing discipline undistracted by legacy business models and unbiased by legacy approaches to building technology, many of which we feel are outdated strategies not appropriate for creating the networks of the future.”