- Lightspeed Faction revealed its official $285 million crypto startup fund aimed to overhaul the interaction of Decentralized applications in today’s market.
- The blockchain VC firm believes that long-term is the best way to aid blockchain startups.
- Africa is currently experiencing an immense surge of web3-based organizations.
2023 has been a trying year for the crypto industry. The prolonged crypto winter, the consistent bombardment of crypto lawsuits, and its ripple effect over other web3 industries like NFT have tested the resilience of crypto traders, investors, and exchanges.
Fortunately, despite many attesting to the end of digital currency, the economy has picked itself up and shown a positive trajectory. The crypto lawsuits have gradually reduced, and Bitcoin is almost reaching its $38,000 mark. In addition, digital asset adoption has shown a positive incline as global payment systems like Visa, Mastercard, and Paypal have taken active steps to integrate crypto payment gateways.
This trend shows significant potential and could create a conducive ecosystem for emerging blockchain startups. This potential outcome has inspired Lightspeed Faction, a blockchain VC firm, to introduce a new crypto startup fund worth $285 million. This new initiative paves the way for the industry to focus more on supporting early-stage projects, showcasing enough potential to introduce a new wave of decentralized applications.
Lightspeed Faction launches a $285 million crypto startup fund.
Blockchain startups or decentralized applications have grown in the past few years. The dynamic, secure, and high-performing nature of blockchain technology has inspired many developers, innovators, and investors to utilize the basic technology of cryptocurrency and apply it to other industries. This line of thought led to Africa’s fastest-growing economic industry, fintech. Its ability to dominate and surpass several sectors inspired many to take up the mantle and utilize blockchain technology in other franchises.
Lightspeed Faction is a blockchain VC firm that believes that the future of technology is Web3. Since 2022, the Blockchain VC firm has dedicated its utilizes, network, and finances to ensure blockchain startups receive the support required to thrive amid these changing times. In recent news, Lightspeed Faction revealed its official $285 million crypto startup fund aimed to overhaul the interaction of Decentralized applications in today’s market.
According to the announcement, the crypto fund will focus on assisting early-stage blockchain startups’ transition into the next level. The crypto fund will mainly raise seed or Series A rounds. Samuel Harrison, the managing partner at Lightspeed Faction, stated that before launching the crypto fund publicly, 20% of its total amount was invested in a handful of blockchain startups.
The deployment period will take two to three years, depending on the investment environment. Banafsheh Fathieth, general partner at the blockchain VC firm, said, “On the maturity arc, most of what you see at the growth stage speaks to crypto as an asset class. It’s a lot of trading use cases or capturing the ethos of ‘this could be an emerging asset class.’ But crypto, as a technology trend, is relatively young. The early stage is where we see the greatest amount of opportunity.”As per the founders of the Blockchain VC firm, the initial goal was to raise $250 million, but through the promise and potential of decentralized application, they surpassed this value. Harrisson clarified that the crypto fund’s LPs comprise institutional and strategic investors from throughout the tech industry. In addition, a small portion of the crypto fund was from family offices and funds.
The Lightspeed faction intends to have complete control when working with any blockchain startup and assist them in scaling into valuable future payers. Harison clarified, “If we went smaller than that, it’s difficult to do because then you don’t have the dry powder to support these companies, especially the high-profile ones with the greater capital needs.”
The Rise and potential of Blockchain startups
At its very core, blockchain startups represent a significant paradigm shift from centralized organizations. It paves the way for a new form of thinking where a single individual can build their organization from scratch. Today, the impact of web3 and crypto startups has gone beyond its initial application, the financial systems. Developers and entrepreneurs have collaborated to escalate this revolutionary shift into other regions.
For instance, Africa is currently experiencing an immense surge of web3-based organizations. Several economic activities like agriculture, real estate, insurance, and even educational sectors are experiencing the beauty of decentralization. Africa’s crypto industry alone has inspired many individuals to launch Afican-based crypto startups that cater to the specific hurdles of the typical African man.
This initiative led to the unicorn startups Flutterwave, Yellowcard, Bitpesa, and many more. Their impact on several communities is tangible, and SMEs and local businesses have turned to the digital world to expand their market gaps.
Lightspeed Faction are the few entities that have seen the potential of such organizations. Its founders previously worked at crypto companies like Coinbase, Blockhain.com, and Amber Group. Thus, they can personally attest to the radicalization blockchain startups can present to the world.
Despite the crypto industry’s slow-paced recovery, the blockchain VC firm believes that long-term is the best way to aid such organizations. Fathieh said, “Markets go up and down; we look at it for 20 seconds of our day, but the underlying fundamental conviction is there, and there’s an open door here.”
Lightspeed Faction intends to pave the way for blockchain startups to thrive. Properly utilizing the crypto fund could increase the rate of digital asset adoption worldwide. Harrison finalized by stating,” It is not about timing the market, because the investment we are making is not a one to two-year thing. If next year is bad, we’ll still be investing, continuing to deploy, and doing what we do with a 10-year time horizon.”