This New $100 Million VC Fund Is Looking To Help Crypto Startups Bridge China And Silicon Valley
October 10 2018 - 8:07AM
ADVFN Crypto NewsWire
Alexander Pack and cofounder Bo Feng will invest $100 million in
crypto projects, funds and companies.Dragonfly Capital
Partners
Its founders make an unlikely pair. But in the fast
moving-intersection of capital and cryptocurrency, a new $100
million fund is looking to turn that into a big advantage.
Called Dragonfly Capital Partners, the fund is the result of a
partnership between one of Silicon Valley’s young crypto investor
enthusiasts and one of China’s most experienced investors.
Founders Alexander Pack and Bo Feng will look to invest in a mix of
crypto-first funds, protocols and applications, as well as tech
startups building infrastructure for crypto-driven economies.
“Crypto is a new asset class, and it made sense to have a new
firm to support it,” says Pack. “We thought older ones would have a
disadvantage.”
Dragonfly’s founders are banking on Asia continuing to be one of
the most, if not the single most, important markets for crypto use
cases, especially in financial applications. They structured the
fund to operate “unconstrained,” says Pack, without the kinds
of restrictions on what types of companies or coins to back
that can limit larger, more established firms.
The fund has already deployed $20 million into more than 20
startups and funds, including price-stable currency Basis, and
protocols, including Spacemesh and Oasis Labs, as well as funds
like MetaStable Capital, in which Dragonfly invested and alongside
of which it has already co-invested in several deals. “Despite
crypto being a global and 24/7 market, it can often feel like two
separate ecosystems between Asia and the West,” says MetaStable
general partner Haseeb Qureshi. “Having a fund that can toe
the line between the two hemispheres is a powerful advantage in
being able to identify future trends and preempt where crypto is
moving.”
Though Dragonfly is new, Pack’s and Feng’s reputations in the
emerging category are not. Pack was working with Arbor Ventures and
serving in a Princeton in Asia teaching fellowship program in Hong
Kong in 2014 when he realized there were more crypto opportunities
in the area than startups. Joining AngelList in San Francisco the
following year, he built a crypto micro-fund and led investments in
Polychain Capital and Numerai—though he passed on
Ethereum—before moving on to Bain Capital Ventures to lead its
“network investing” in crypto funds and other nontraditional VC
opportunities, backing 16 funds and 11 startups. He met Feng as the
20-year-plus veteran founder of Ceyuan Ventures co-invested with
him in several deals including Basis and cryptocurrency exchange
OKEx.
Dragonfly cofounder Bo Feng brings more than 20 years of VC
experience in Asia.
When the two struck out on their own, they did so with
a who’s who of Silicon Valley and China tech support. Pack’s old
boss, Forbes Midas List member Salil Deshpande of Bain
Capital Ventures, invested, as did Andreessen Horowitz cofounder
Marc Andreessen and its crypto fund co-leader Chris Dixon, as well
as Founders Fund’s Cyan Banister and Polychain’s Olaf Carlson-Wee.
In Asia, the founders of Baidu, Meituan-Danping, Meitu and China
Renaissance Bank invested alongside Midas List VCs Neil Shen of
Sequoia China and Bob Xiaoping Xu of Zhenfund, among others.
Strategic investors like OKEx and Bitmain also joined.
Dragonfly will need to carve out a niche in a highly competitive
and fast-growing market offering capital to promising crypto
projects—efforts that are also well-versed in alternatives to
venture capital altogether. The founders’ credibility and their
cross-Pacific pitch has resonated so far, at least with founders
like Basis CEO Nader Al-Naji. Pack met Basis while at Bain Capital
Ventures and helped lead it to invest in a seed funding round with
Andreessen Horowitz and a group of crypto funds, while Feng
invested from Dragonfly’s fund. Pack was instrumental in helping
Basis navigate a private pre-sale, Al-Naji says, as well as in
bringing on recent Federal Reserve chairman candidate and Stanford
economist John Taylor as an adviser.
In an interview, Al-Naji tells Forbes he values
Dragonfly as an investor not just for its Asian expertise but also
for efforts that goes beyond what its total dollars invested would
dictate. “I think VC firms can sometimes be hands-off when they’re
not lead investors, but they’ve been the complete opposite,” he
says. “They reach out frequently for advice and support.”
That’s the reputation that could help Dragonfly find a seat at
the table even in a complex funding environment where many crypto
funds compete in one moment and invest in each other in the next.
Pack says the hype—and deflation of hype—of cryptocurrencies such
as bitcoin hasn’t lowered the quality of projects for investors to
support, just their prices. “We try to take a very long-term
perspective,” Pack says. “Crypto has the power to transform things
at a deeper layer. Not just money—transforming what we think of as
property.”
Source: Forbes
By Alex Konrad
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