White Star Capital, better known as a VC firm which, in its time, has backed the likes of Digg, LaunchRock, Meero, Summly, and Tier, among others, is moving into the hot world of crypto and blockchain with a new $50 million Digital Asset Fund.
The special-vehicle fund will specialize in investing in crypto networks and blockchain-enabled businesses and was previously going to be $30 million before raising more backing. Both Bpifrance and Ubisoft are among those institutions backing the new fund.
The fund will be run by New York-based General Partner Sep Alavi and supported by Principals Thomas Klocanas in New York and Sanjay Zimmermann in Toronto. They will deploy between $500,000 and $3 million in initial investments into 15-20 companies with a focus on North America and Europe.
Alavi said: “We are hyperfocused on this space and we expect to see further innovative use cases such as crypto credit, DeFi, NFTs, metaverses and more manifesting at an accelerated pace … With this fund, we are actively investing in crypto protocols, infrastructure, privacy, financial, gaming and social use cases.”
The fund has already made six investments including; dfuse, Multis, Paraswap, Rally, Safello, a European crypto brokerage that went public on the Nasdaq First North stock exchange on May 12, and Ledn, a global digital asset savings and credit platform.
Yoann Caujolle, managing director of Bpifrance said: "It’s critical that emerging crypto and blockchain-enabled startups receive investment from firms and professionals who have the experience and knowledge to help drive their businesses forward. We’re pleased to partner with the Digital Asset Fund team for bringing their support and vision into the French and European blockchain and digital asset ecosystem.”
Over a call, Alavi told me: “White Star is investing across three funds, obviously our fund one, fund two, and in this new specialized Digital Asset Fund. Historically we've invested in enterprise and consumer businesses, we’ve not done any blockchain, but for two years we've been looking at this sector. And we believe that this merits its own dedicated vehicle. I've been personally investing in the blockchain ecosystem since 2015 and bring five-plus years of domain expertise and then I was able to build a team around this new fund."
"We are looking at the three main verticals in this sector. The protocol layer, the infrastructure layer, and the application layer. That's the kind of high-level thesis. The protocol layer is where we invest in tokens, because it’s important to mention that the fund will also hold tokens as investments as well as equity. On top of that, we're pretty much agnostic and opportunistic. We see great use cases in decentralized finance. We see some great use cases in the NFT space and have made investments there as well. As long as we're true to those three verticals that I mentioned, we will capture great value there.”