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.
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