Electric Capital, a Bay Area investment firm, announced a combined $1B raise for the development of two new funds on Tuesday, March 1, 2022: a $400M venture fund and a $600M token fund.
Electric Capital’s plans
It’s a step higher from Electric’s previous fund, a $110 million vehicle unveiled in August 2020, and cements the firm’s status as one of crypto’s venture kingmakers — but with a different strategy. Andreessen Horowitz (a16z) and Paradigm have both announced multibillion-dollar investments in recent months.
The funds will focus on decentralized finance (DeFi), non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs), layer 1s, and blockchain infrastructure, according to a press statement.
Curtis Spencer and Avichal Garg, co-founders of the funds, said in an interview that while the funds will evaluate a wide range of investments, they will focus on projects with a strong community focus and fair launch token allocation.
“It used to be with token allocations it was very insider-heavy, and now we’re seeing the inverse of that – 60%-65% of token allocated to the community, which is how it should be,” said Garg. “People are playing with these token-economic incentives, where if you’re willing to do what’s right for the network – if you’re willing to be locked up for four years or something – you get disproportionate rewards. That presents an opportunity for long-term investors.”
Electric Capital was created by Spencer and Avichal Garg in 2018 and has since invested in Bitwise, dYdX, Gitcoin, Immunefi, NEAR, and Syndicate, among other projects.
Paradigm’s $2.5 billion funds, FTX’s $2 billion venture fund, and Pantera Capital’s $1 billion funds are among the largest crypto funds launched in recent months.
Sequoia Capital stated last month that it will launch the first-ever crypto sector-specific fund. The Sequoia Crypto Fund, which is estimated to be worth $500 million to $600 million, will mostly invest in tokens.
