DBA Crypto, one of the most eagerly awaited cryptocurrency fund launches of 2022, has struggled to get off the ground. The institutionally geared investment startup aimed to raise at least $500 million of outside capital and planned to launch in late 2022 or early 2023. However, three core team members have since moved on to other crypto ventures while sources previously claimed DBA was in advanced conversations with potential anchor investors, including established crypto investment managers.
The New York-based startup recently slashed its fundraising goal from $500 million to $150 million, according to June SEC filings and two anonymous sources familiar with the matter. The downsized amount is split between an onshore and an offshore version of its flagship DBA Crypto Fund 1. DBA Crypto is led by Michael Jordan, formerly Galay Digital’s co-head of investments, and Jon Charbonneau, an alum of Delphi Digital and Deutsche Bank.
Initially, DBA intended to follow a joint investment strategy, focusing on both digital asset venture plays and liquid strategies, such as derivatives. However, when the digital asset markets collapsed in the fourth quarter of 2022, DBA experienced difficulties raising capital, along with several other high-profile new investment initiatives.
Sources claim the three partners who left the firm did so, at least in part, due to a pivot in strategy. DBA shifted its focus to crypto-native venture-style investing, centering on both traditional equity plays and protocol stakes. The updated strategy allows DBA to work towards identifying fundamental growth, investing in leading players within that sector, building alongside a concentrated portfolio, and managing associated risks.
Yet, DBA is not the only crypto venture struggling to raise funds as many in the space find themselves in difficult positions due to the inability to secure capital. As one source put it, “A hedge fund can’t operate under $100 million, because it doesn’t really cover your costs.” Critics argue that DBA’s case highlights the challenges faced by many crypto projects when seeking to create financially viable ventures in an increasingly competitive and uncertain market.
Source: Blockworks
