Electric Capital Raises $1B to Invest in Crypto Startups

Palo Alto-based Venture Capital firm Electric Capital announced Tuesday that it has raised $1 billion to invest in the cryptocurrency ecosystem.


According to the official post on the startup’s blog, it confirmed that the capital would be used to fund a variety of crypto networks, Web3 protocols, and blockchain-enabled businesses.

The capital was raised in 2 distinct rounds, including one $400 million pulled back in 2021 with a plan to invest this into crypto token investments. The second involved a $600 million fund earmarked to make only token-focused investments.

“We are long-term investors and partners to our founders. We have spent the last four years building software and data systems that enable us to participate in Web3 ecosystems. We use the infrastructure we have built to provide liquidity, drive key governance proposals, help teams better understand their ecosystems with our data, and more,” the startup said in a statement.

The monetary valuation of funds that will be invested in the startups it chooses to back will range from $1 million to $20 million. Unlike the majority of venture capital firms whose approach to investment is more or less passive, Electric Capital is working on the frontline, conducting research and helping its partners get the best out of their business models.

Riding on Deep Experiences as Tech Founders

The founders, Avichal Garg, 39, and software engineer Curtis Spencer 40, are both experienced investors and entrepreneurs. The duo co-founded Spool, a bookmarking startup that lets consumers save articles and videos on their phones that Meta Platforms Inc later acquired in 2012. Avichal and Spencer stayed on at Facebook until 2018, when Electric Capital was founded.

The Electric Capital team also has plans to onboard as many engineers within its ranks as possible. The belief is that the most successful businesses have the presence of software engineers at their core, particularly some of the startup’s competitors, including Paradigm and Hack VC.

The capital raised by Electric Capital comes off as a testament to how rebooted venture capital firms are in going all out with backing cryptocurrency-focused startups. Avalanche, Binance, and FTX are amongst the big players in the space that have earmarked ecosystem funds to invest in related startups with inherent potential.

Image source: Shutterstock


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Celo Secures $20 million From Investors In Funding Round

Open-source blockchain ecosystem Celo has announced that it raised $20 million in its latest round of funding. This was revealed in a press release on February 10, 2021, and will help expand its growing ecosystem. 

$65 Million Raised Since Launch

Celo revealed that the startup had raised more than $65 million from several high profile investment ventures, including Polychain Capital, Reid Hoffman, Jack Dorsey, and Coinbase Ventures. The latest funding round raised $20 million and included new partners, including Andreessen Horowitz, Greenfield One, and Electric Capital. The startup further stated that the money raised would be used to develop new products. 

Celo is a proof-of-stake blockchain built on Ethereum that focuses on supporting tokenized assets and stablecoins while using cell phone numbers to secure users’ public keys. Since its launch in 2017, the Celo ecosystem has developed and launched a mannet, a native asset, stablecoin, and mobile payment app. Also, Celo created a 50 member group in 2020 named “Alliance for Prosperity” to achieve financial inclusion. 

As per the development, Rene Reinsberg, co-founder of Celo stated that the platform now has a rich ecosystem. “We now have the technology to create a better financial system – a rich ecology of digital assets and products that allow individuals and organizations to more seamlessly transact and manage risk,”

Electric Capital chief Avichal Garg echoed similar sentiments and added that the mobile-first philosophy was a significant boost for the Celo ecosystem. “A mobile-first philosophy means anyone can onboard into the Celo ecosystem quickly and with just a mobile phone number.

Celo Launches Global Remittance Platform

Celo also revealed the launch of its mobile remittance and p2p payments platform, Valora. The app development began in early 2020, followed by a testing and pilot phase towards the end of the year. 

According to Celo, with Valora, users will be able to send and receive funds from anywhere around the world within seconds. Users will also be able to use the Celo stablecoin cUSD in Valora to pay for goods and convert the token to gift cards on Amazon, Starbucks and Walmart

The app is built on the Celo blockchain and features little to no transaction fees. Since its beta launch in September 2020, Valora has seen exponential growth and adoption, with tens of thousands of users, across more than 100 countries performing transactions. 

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Saddle Raises $4.3M for Slippage-Free DeFi Trading

Saddle, the latest decentralized finance (DeFi) system to come out of Silicon Valley, has raised $4.3 million in seed funding from Framework Ventures, Polychain Capital and Electric Capital. 

Announced Tuesday, the new automated market maker (AMM), which has just gone live, is focused on preventing slippage in value between different types of pegged-value assets like stablecoins and tokenized bitcoin. The startup, which now has four full-time coders, was recently spun out of Thesis, the a16z-backed firm behind projects like Fold, tBTC and Keep.

Slippage refers to the difference between the expected price of a trade and the executed price of that trade. Crypto, being highly volatile and reactive, means even stablecoins and pegged tokens get hit with a large amount of slippage when traded on-chain. 

“If you’re trading $100 USDC for USDT, you’d expect to get pretty close to $100 USDT,” Saddle founder Sunil Srivatsa said in an interview. “For the longest time, that wasn’t possible. You would trade $100 of USDC, and maybe get out like $97 or $98 [in USDT].”

AMMs like Uniswap and others, which pool capital together and set rules for how you trade against the pool, have tolerance settings where users can set the maximum percentage of price movement they can live with. 

“So one of the problems that we’re setting out to solve is to basically unlock deep on-chain liquidity for pegged value crypto assets,” said Srivatsa, a former Uber engineer also known as @devops199fan to those in the DeFi community. “That means you’re able to make trades and lose a very minimal amount to slippage and transaction fees.”

Saddle plans to use Synthetix’s virtual synths. (Synthetix makes synthetic assets where instead of trading ETH for USD, users trade sETH for sUSD.)

Srivatsa said there is currently a limitation with the Synthetix system, since trades between “synths” come with a five-minute settlement delay before a trader gets the underlying assets (this is to prevent front running).

However, this breaks composability, said Srivatsa, such as when executing a single trade between different tokens like sBTC and wrapped bitcoin (WBTC), for example. Virtual synths fix this by introducing a new token that basically represents a claim on that unsettled trade, Srivatsa said.

“So you can use that as a placeholder, atomically, and then settle after the fact,” he said. “The reason you want to do this is because Synths also have this pretty exciting property where you can trade between them with no slippage – at any size, up to the size of Synthetix’s global pool.”

Starting today, Saddle offers a choice between four tokenized bitcoin options in its first liquidity pool: renBTC, WBTC, sBTC and tBTC, Srivatsa said, and in the near term, will introduce new pools for stablecoins and ETH-based tokens.



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