Reddit co-founder launches $500m crypto VC fund
Reddit co-founder Alexis Ohanian has raised $500m across two new VC funds focussed primarily on crypto start-ups.
Ohanian’s venture-capital firm 776 Management plans to funnel the majority of the funds into crypto in 2022, the Wall Street Journal first reported.
“It will be the majority of the portfolio by the end of this year,” Ohanian said about the firm’s investments in the crypto sector in comments to the Wall Street Journal.
Crypto companies already account for around 40 per cent of the firm’s portfolio. 776 has invested in videogaming startup Axie Infinity, Bitcoin rewards start-up Lolli, and crypto tax company CoinTracker, making more than three dozen investments in total.
The announcement comes amid booming VC investment in the crypto space. A string of high value funds for crypto start ups have been announced in 2022 with Andreessen Horowitz reportedly planning to launch fund worth $4.5bn, FTX announcing a $2bn crypto fund in January and Crypto.com growing its funding arm to $500m.
Last year, $31.6bn of capital was poured into crypto start-ups, more than the previous ten years combined according to Pitchbook data.
Pitchbook emerging technology analyst Robert Le said funds were betting big on the belief that the next generation of financial apps and internet services will be crypto-based.
“2021’s increased venture funding into the crypto space highlights the growing traction of crypto, defi, and web3,” Le told Morning Wire.
“Many of the major crypto exchanges, wallets, and defi protocols had an explosion of growth during the year regarding active users and fees generated. VCs have been attracted to this growth. Investors are also betting that the next generation of financial apps, social media, and other online services will be crypto-native services,” he continued.
Social media site Reddit was co-founded by Ohanian and Steve Huffman in 2005. The site has since shown its support for digital assets by creating its own line of NFT based on the Reddit avatar, known as a crypto Snoo.