Crypto has taken a huge hit in recent weeks. But don't mistake the pricing slump for a loss of enthusiasm among core investors.
Austin-based Multicoin Capital Management LLC, one of the largest crypto-focused firms in the country, said on Tuesday it has raised $430 million for its third fund. From that war chest, the firm plans to make investments from $500,000 to $25 million in early-stage crypto and Web3 startups, and it noted it might dish $100 million or more for key late-stage projects, which would also draw from its hedge fund.
"While we continue to make deep tech and infrastructure investments, we are spending an increasing percentage of our time on things that directly face consumers and that are poised to reshape massive consumer-facing markets," the firm wrote in the announcement.
Multicoin was founded in 2017 by managing partners Kyle Samani and Tushar Jain, and it has personnel in Austin and New York. The firm's first fund launched in 2019 with $75 million, which it followed up in 2021 with a $100 million fund, according to Crunchbase. It has made 96 investments in total, including eight deals since April this year.
The firm specifically called out its core themes for its third fund, including dataDAOs, which create incentives for contributing to public databases; proof of physical work, which incentivize verifiable work that builds real-world infrastructure; and companies creating creator monetization tools.
The new fund comes amidst the most tumultuous period the relatively young crypto industry has been through. Layoffs and lawsuits, including one naming Multicoin that emerged last week, have become almost daily headlines in the crypto sphere. And on June 13, crypto lender Celsius Network LLC — which in late 2021 raised a $750 million series B round at a $3.25 billion valuation — filed for chapter 11 bankruptcy protection.
But Multicoin remains far from alone in being aggressively optimistic about the future of the broadening Web3 ecosystem. VC giant Andreessen Horowitz, for example, may have slightly slowed its investing in recent months, but it also announced it had raised a $4.5 billion crypto fund in May. And back in January, before some of crypto's toughest times, FTX Trading Limited announced a $2 billion crypto-focused fund.
In an interview with CoinDesk in late June, Samani said that the market downturn is having minimal impact. “Our portfolio companies are very well-capitalized. I'm not worried about" trouble, he told the publication.
