The new fund will back startups working on blockchain-based solutions, including zero-knowledge infrastructure and emerging Bitcoin ecosystems.
Venture capital firm Lemniscap has secured investment for a new fund targeting Web3 startups in their early-stage development.
According to an Aug. 28 announcement, the new fund will have $70 million to spend on a range of blockchain-based businesses, including zero-knowledge infrastructure, consumer applications, emerging Bitcoin ecosystems, security, and decentralized physical infrastructure (DePIN).
The new fund is also backed by Accolade Partners, a fund of funds that also targets early-stage ventures in the blockchain industry.
Lemniscap is known for targeting early-stage startups in the crypto space. The venture firm launched its first fund in 2017, just before the 2018 crypto market crash. Since then, it has backed several popular protocols across the industry, including Avalanche, Fairblock, Celestia, EigenLayer, Euler, ParaSwap, and Axelar, among others. To date, the firm has made over 130 investments in the Web3 space.
The company’s thesis prioritizes “long-term success rather than short-term gains,” focusing on products and services based on blockchain innovation. According to Lemniscap, startups in their portfolio are supported both with capital allocations and strategic guidance.
The Web3 startup ecosystem has seen a resurgence in 2024 following the downturn the previous year, which was marked by bankruptcy cases, regulatory uncertainty and a slump in crypto token prices.
Related: VC Roundup: Crypto fundraising grows, but investors are more wary
Source: Pitchbook
According to Pitchbook, crypto startups raised $2.7 billion in the second quarter of this year, with infrastructure projects such as Monad and BeraChain leading the pack. Despite the recovery in capital raised, the number of deals declined by 12.5%, indicating that while investors may be more selective, they are committing larger amounts to projects with strong potential.
In 2023, crypto firms secured a total of $10.1 billion in investments. Based on current industry trends, Pitchbook expects startup funding to exceed that level in 2024, potentially reaching $10.8 billion by year-end.
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