It’s deep into crypto winter big venture fund debuts and far fewer than in previous years. But the freeze isn’t stopping some venture capitalists from launching new funds targeting the decentralized technology market.
The firm exclusively told TechCrunch that Dispersion Capital has lined up its first $40 million fund to invest in decentralized infrastructure. The venture vehicle is supported by Web 2.0 and Web 3 entities, including WeNade, Circle Ventures, Ripple, Alchemy Ventures, NGC and individual general partners. It will focus on raising capital in pre-seed and seed rounds, and has already committed 10% of the fund.
The development of blockchain infrastructure technology has been slow, said Patrick Chang, founder and managing partner of Spread Capital. “We believe there is much more that needs to be built.”
Chang said that blockchain and decentralized computing are still very new, arguing that they still have “a lot of missing pieces”. In his view, existing blockchain infrastructure technology was built bit by bit, something new development work that is bringing Web2.0 “know-how” to Web3 can help harmonize.
Chang said that during the 2021 crypto bull market, plenty of startups were established building NFT projects, decentralized finance protocols and more, but few upstart technology companies focused on the underlying infrastructure itself. “What was frustrating for users and people coming to Web 3 was the onboarding, scalability and hacks. The infrastructure was incredibly immature and people weren’t thinking about it.”
Fast-forward to today and there are tons of startups and developers working to improve the Web3 infrastructure.
Spread plans to deploy its funds to startups that want to help onboard new crypto users with fresh data infrastructure, cyber security, and technology like smart contracts.
While it is primarily looking at US-based companies, Diversion actively invests in other regions as well, Chang shared. About a quarter of its active investments are based in Israel, but the firm is also seeking Asia-based builders, given the proliferation of ZK, or zero-knowledge technology developments, in that region, Chang noted.
“The mission for us is how can we bring Web3 to the same level as cloud computing, this invisible technology that not everyone realizes they’re using, but is doing,” Chang said. “In the long term, the focus is on how we take Web3 to the masses and bring [to] one billion users.