In response to a recent decline in venture capital (VC) interest in the cryptocurrency industry, 10T Holdings, a leading VC investment firm, is launching a new fund worth $200 million. The fund, TenSquared Capital (10SQ), will focus on financing budding cryptocurrency startups, and it aims to emphasize equity investments over token investments.
The New Crypto Fund from 10T Holdings
Sources familiar with the matter claim that 10T Holdings, backed by Alan Howard, is seeking investors to back its latest investment fund, TenSquared Capital (10SQ). The firm has already exhausted its current capital and plans to halt new investments, prompting it to launch this new fund. According to reports, some of the limited partners of 10T Holdings have already invested in the new fund.
The primary focus of 10SQ will be to invest in digital asset startups at various stages of growth, but it will emphasize equity investments over token investments. Additionally, 10SQ aims to register itself as an investment advisor, following in the footsteps of successful cryptocurrency-friendly VC firms such as a16z and Sequoia Capital.
Furthermore, 10SQ is reportedly considering investing in two startups, one of which is developing a cryptocurrency wallet infrastructure.
VC Investment Decline in Cryptocurrency Industry
VC investment in the cryptocurrency industry has dropped by 80% in Q1 2023, as reported by Bloomberg. However, despite the significant decline in VC interest in the cryptocurrency industry, some investors still seem to be interested in investing in cryptocurrency startups.
The decline in VC activity in the industry is not surprising, considering the sharp decrease in VC activity across the board this year. A surge in interest rates, combined with recent banking disruptions, has deterred many VC investors. In the meantime, the growing AI craze, fueled by the sensational chatbot ChatGPT, has captured the attention of VC firms, mainly at the expense of cryptocurrency startups. In Q1 2023, the AI industry received approximately $18 billion in AI industry VC funding.
The launch of the new crypto fund from 10T Holdings is a significant development for the cryptocurrency industry. The focus on equity investments rather than token investments is a sign of a maturing industry. Despite the decline in VC interest in the industry, there is still hope for budding cryptocurrency startups. However, it remains to be seen whether the new crypto fund from 10T Holdings will attract enough investors to finance the development of these startups.
What is 10T Holdings?
10T Holdings is a prominent venture capital investment firm that manages over $1.2 billion in assets.
What is the new fund from 10T Holdings called?
The new fund from 10T Holdings is called TenSquared Capital (10SQ).
What is the focus of the new crypto fund from 10T Holdings?
The primary focus of the new crypto fund from 10T Holdings is to invest in digital asset startups at various stages of growth.
What is the difference between equity investments and token investments?
Equity investments are investments made in exchange for ownership in a company, while token investments are investments made in exchange for tokens, which represent a share in a company’s profits.
Why has there been a decline in VC interest in the cryptocurrency industry?
The decline in VC interest in the cryptocurrency industry is due to a combination of factors, including a surge in interest rates, recent banking disruptions, and a decrease in VC activity across the board.
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