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CoinFund on the Lookout for Promising Web3 Companies After $300M Raise

Cryptocurrency investment firm CoinFund has raised $300 million for its latest fund: a venture capital-style vehicle that plans to focus on early-stage Web3-oriented startups.

Though CoinFund has been investing in seed-stage Web3 startups since 2015, Managing Partner David Pakman told Blockworks the latest fund aims to back companies thereafter.

“Seed funding makes bets on teams and a thesis, and the venture fund is making investments in companies that are showing some traction — where there’s evidence that things are working and we think there may be big outcomes,” Pakman said. “Our strategy is to invest in both some of our existing portfolio companies, and also new companies that we missed, or we never had the chance to meet the team. Our goal with this fund is to assemble a portfolio with a mix.”

As a digital assets generalist, CoinFund doesn’t have its sights focused on a specific area of Web3, but Pakman said the team has identified promising sectors.

“Layer-1s, DeFi [decentralized finance], NFTs [non-fungible tokens], gaming, Web3 infrastructures — such as stablecoins and payments, asset management and exchanges and on-ramp crypto wallets — are all showing promise today,” he said.

As the ecosystem matures, Pakman believes new areas to invest in will emerge. Rather than building centralized computing architectures, developers could focus on building networks and protocols where users and developers can share ownership of the infrastructure — and its growing cadre of tangential applications.

“The job of this venture fund would be to determine the teams that want to build big things that are intersecting with adoption,” Pakman said.

Even so, Pakman said being thematically accurate as an investor is not enough.

“You have to be right about the timing of adoption,” he said. “If you bet on cloud computing and AI [artificial intelligence] in 1998, you would not have been successful, but if you bet on cloud computing in 2008, you would be very successful.”