The crypto industry is more than a decade old, but it is still young compared to the legacy financial market. Therefore it depends on external funding to thrive. This funding comes from crypto venture Capital (VC) firms.
Let’s say a new crypto project wants to launch, but the team doesn’t have the funds to launch the project initially even though it is such a great idea. The team can present its ideas to a VC firm to look for funding.
If the firm(s) see prospects in the proposed project, it will then release the required funding in exchange for a stake in the project.
This is a fast-growing market that reached $25.2 billion in 2021 from $3.1 billion in 2020 — a 713% increase. It is expected that this trend will grow even further in coming years, which means more new crypto projects will emerge as long as they are sound projects with the right potentials for growth.
In this guide, we highlight the top 5 VC firms that have been supporting the crypto industry and that still do to this day.
Pantera Capital
Pantera Capital is “the first U.S. institutional asset manager focused exclusively on blockchain technology.” Created in 2003, the company pre-dates the crypto industry, initially focusing only on blockchain technology, the technology that underpins crypto.
It has its headquarters in Menlo Park, California, and currently invests in blockchain projects and tokens that drive adoption and growth in the industry. The company has the reputation of being a blockchain investment fund with a proven record of providing well-diversified options to its investors.
Some of its most notable investments include 0x, Balancer, Brave, Cosmos, Filecoin, and Polkadot.
Coinbase Ventures
Coinbase Ventures is the investment arm of Coinbase, and is one of the top venture capital firms in the industry.
The firm focuses on finding and investing in promising early-stage crypto projects and startups. It provides them with the capital and resources they need to move into the next stage of growth.
Created in 2018, Coinbase Ventures has generated more than $1 billion in assets. It continues to focus on providing funding to blockchain-based projects to promote the industry as a whole.
Its most notable investments include Compound, Etherscan, Keep, Cointracker, Synthetix, and OpenSea.
a16z – Andreessen Horowitz
As the name suggests, this firm was founded by Ben Horowitz and Marc Andreessen in 2009, making it one of the oldest. It is a leading crypto venture capital investment company that provides funding for blockchain-based firms.
With its headquarters in Menlo Park, California, in the US, the firm aims to bring traditional venture capital investments to the crypto world. Its top projects include Digital Ocean, Trust Token, Solana, Phantom, MakerDAO, and CoinSwitch.
Binance Labs
Binance as an exchange needs no introduction, but its investment arm, Binance Labs may be unknown to many. The Binance subsidiary invests in crypto projects as an accelerator.
It identifies promising up-and-coming cryptocurrency projects and entrepreneurs and empower them with the resources they need to move forward.
Unlike other traditional VC firms which aim to profit out of supporting crypto startups, Binance Labs is kind of a way to give back to the industry by supporting its growth.
As you probably know, Binance is the largest crypto exchange in the world by trading volume, so there’s no better way to give back than to support the industry. Top projects in its portfolio are Harmony Figment, Axie Infinity, 1Inch, Band Protocol, and Moonbeam.
Digital Currency Group (DCG)
DCG is also a household name in the crypto industry, thanks to crypto investment firm Grayscale which is one of its projects.
The firm invests in early-stage companies within the blockchain sector, and has a global presence with investments in over 100 projects in more than 30 countries.
Its top investments include BitPay, Brave, CoinDesk, Coinbase, FTX, and Kraken among many others.
