Kraken Ventures recently made a notable announcement. They are planning to raise $100 million in their second funding round, doubling down on their previous investments. This fund aims to target early-stage founders and give them comprehensive support from initial capital to IPO. This move is both bold and surprising, considering the ostensible decline in the market for cryptocurrency and blockchain-linked ventures.
Despite the massive fund goal of $100 million, Brandon Gath, the Managing Partner for Kraken Ventures, states that the firm strongly believes that smaller funds best serve both entrepreneurs and investors. The argument here is that entrepreneurs get a partner who is more hands-on, while smaller funds statistically have better performance records than larger ones. With this approach, it is expected that this substantial sum of money would be divided among numerous projects, rather than funneled into one or two major investments.
Kraken Ventures claims to have invested in at least 32 companies, with the majority being Series A funding. As one of the latest moves, it helped fintech start-up Rightfoot raise $15 million, a firm that is developing a data portal for computer-permissioned data. Prior investments of Kraken Ventures have included AI companies, decentralized finance organizations, and numerous companies focused on blockchain technology.
On the other hand, it’s worth noting that this approach does not occur without risks. Regardless of the firm’s track record, the undeniable uncertainty of crypto and blockchain investments is still there. Factors such as price volatility and regulatory risk in the cryptocurrency space, as well as the dependence on the success of start-ups, are significant concerns surrounding this venture.
In retrospect, if successful, the result will be strengthening the financial ecosystem by fostering early-stage founders who are working on blockchain-based products. This will serve to create a more open, transparent financial system aligning with the mission of Kraken, the cryptocurrency exchange.
In conclusion, it’s important to realize that while the venture seems exciting and holds potential for significant gains, the risks associated are substantial and should not be ignored. After all, the spirit of cryptocurrency and blockchain is all about disruptive change, but it also reminds us of the classic phrase “high-risk, high-return”.