Multicoin Capital, a U.S.-based asset management firm focused on cryptocurrencies, raised money in a round of funding that included a bunch of big-name investors and institutional investors.
According to a report in Reuters citing Kyle Samani, co-founder of Multicoin Capital, the capital it raised led by Marc Andreessen, the venture capitalist, will help it reach its $250 million funding target for its crypto fund by the end of June. The fund currently has around $50 million invested, noted Reuters. “What you’re seeing is the next wave of serious investment coming to an exciting, recently-legitimized asset class,” Samani told the news service. Multicoin thinks cryptocurrencies are here to stay and views them as a three- to four-year investment. That is a lot longer than the current crop of crypto funds that have a time horizon of a few months, reported Reuters.
Multicoin is in a crowded field, with Reuters citing data from Autonomous NEXT that shows there are 225 crypto funds with combined assets of $3.5 billion to $5 billion. Other investors in the Multicoin fundraising round include David Sacks, the first chief operating officer of PayPal and founder of enterprise social network Yammer, and Elad Gil, co-founder of genomic testing company Color Genomics, Samani told Reuters. Chris Dixon, a general partner at Andreessen Horowitz, and Bill Lee, a partner at Craft Ventures also invested, the executive said. The report noted the funding underscores a trend in which investors are investing in crypto funds as individuals rather than the entire company. That's because a lot of venture capital funds have agreements with investors that prevent them from getting involved in high risk investments. “While there are lots of similarities between crypto investing and traditional startup investing, there are many differences,” Samani said. “Most obviously, crypto assets become liquid much sooner in their life cycles than traditional private equity. In addition to liquidity, everything in crypto is open source, which requires thinking about investing in a fundamentally different way.”