Why we started SparkChain Capital
Earlier this year I started to collaborate with Moses Ma from FutureLabs on a number of blockchain concepts & ideas. One of them was a project on the IP Blockchain, a cooperation between Moses , Mark van der Waal, Vrije Universiteit Amsterdam & myself. We presented the project , “The IP Blockchain: enhancing global responsiveness to infectious disease outbreaks. “ at Rebooting the Web of Trust in Paris during spring 2017 to an excited audience of geeks.
That became the beginning of months of deep digging and researching all things blockchain and crypto currency. Intellectually fascinated by the potential of blockchains and crypto currency, I shared my passion with the rest of the Sparklabs team. Slowly but surely the idea of setting up a separate dedicated fund focusing on blockchain and crypto currency started to grow on us. However, with all the hype and the crazy ICO fever going on, we wanted to make sure that we got it right from the outset and built the best possible team to source deals, conduct due diligence and navigate this challenging and dynamic space.
Luckily, Joyce Kim , who was already an early mentor to Sparklabs accelerator and a long term friend of my partner Bernard Moon was considering her next venture. Bernard performed his voodo magic and managed to convince Joyce to join us. For those of you who are not familiar with Joyce, Joyce was the co-founder of Stellar.org the first cryptocurrency protocol for the unbanked which is being used by IBM for their blockchain banking solution. She has also been a VC at Freestyle Capital, but more importantly, Joyce is a brilliant, thoughtful and very socially engaged entrepreneur with deep experience in blockchain and crypto space and a great fit with the rest of the team. We are very fortunate to have Joyce leading SparkChain Capital’s efforts to help funding the leading blockchain and crypto startups of the future.
Besides Joyce and myself the team consists of Will Chu, former Executive Director at Zheng He Capital. Will led their $500 milllion Series A round into Lufax and Jay McCarthy, Co-founder of SparkLabs Global and Managing Partner at Pacific Advisers where he advised on deals such as an institution investor’s $175 million investment into JD.com. In addition, Moses Ma from Future Labs has joined us a venture partner.
World class advisors
Given how challenging and dynamic the blockchain and crypto currency sectors are, we have built a team of world class advisors such as Dan Boneh (Professor of Engineering at Stanford University and renown thought leader in applied cryptography), Wu Choy Peng (CTO at GIC, Singapore’s sovereign fund that manages over $350 billion in assets), Mike Joo (Head of Global Rates and Currencies Origination Business at Bank of America Merrill Lynch), Koichi Miyamoto (Partner at Anderson Mori and Tomotsune), and Ling Hao (Partner at Hylands Law Firm) as well as others (not named here for a reason). In addition, we are also working with a very solid legal team with SEC backgrounds and with multiple ICOs under their belt.
We are not new to the blockchain & crypto space
Blockchain is actually not new to us. We have through our accelerator in Seoul, SparkLabs, already invested in Blocko, the leading enterprise blockchain company in South Korea with real clients like: Samsung, LG, Hyundai and Cisco. Sentbe, the leading bitcoin remittance company in South Korea (2015). Through SparkLabs Global (global seed fund), the team invested in Cryex, an early blockchain compatible FX trading, clearing and settlement system based in Stockholm (2014), and other related startups. Note that all of the above companies were traditional venture investments, not ICOs.
Blocko is particularly interesting, as it has real products and real paying costumers. They have already saved their clients more than $75M in fees through their Coinstack platform.
So what is our focus?
We will focus on innovative companies in the cryptocurrency and blockchain sectors across the globe, helping startups build long-lasting technological platforms and leveraging SparkLabs Group’s extensive network in Asia. The most active blockchain and cryptocurrencies markets outside of the U.S. are in China, Japan and South Korea, markets that we have deep experience in and where we have a deep network.
As opposed to Sparklabs Global Ventures, our global seed fund, SparkChain Capital will focus on series A rounds in the range of $1–3M. That does not mean that we totally rule our some seed investments. However, they will have to be in the later stage and bigger range to be relevant. As for pure seed investments, startups can always pitch our global seed fund.
Unlike most crypto funds, we will not trade and speculate in crypto currencies. We’ll leave that to others. However, we plan to keep around 10% and hold long term.
Investing in teams not ICOs
We will continue to invest in the best possible teams as we’ve done in the past. The basics for investing hasn’t changed at all. The basics remains the same: it is all about the team. Therefore we will vet the teams rigorously as part of the due diligence. The same is true for the platform and code. We will be doing due diligence on the tech in order to make ensure that it is truly scalable and optimized for what it sets out to accomplish.
No blind investments in hyped ICOs for us thank you.
We believe that serious team will still seek out serious and experience investors before even considering and ICO. Therefore most of our investments will likely to be prior to an ICO. Having said that, we will participate in select and carefully vetted ICOs as well.
How to pitch us
Since we announced the form we have been flooded by pitches from startups starting out by stating that they are doing an ICO, how much they are raising and the discount they offer. This, BEFORE they even talk about their product or service. Needless to say, they will not receive any reply from us.
Best way to reach us is via an introduction though somebody that knows us and we trust, as it is not possible to get back to people “cold emailing” us out of the blue.
Blockchain will power the future
I am a strong believer in the potential of blockchain technology as disruptive and decentralizing force of nature and am very excited about our new fund and our team. Yes, it feels like 1999 again with all the hype and where the past social media guru’s have now turned into crypto experts and yes, I believe that the majority of blockchain & crypto companies and ICOs are going to fail, but I am a strong believer in our team and hope that we will be able to fund some of the best teams out there.
Selected new coverage:
South Korea’s SparkLabs Launches $100M Fund To Power Blockchain Startups Worldwide (Forbes)
SparkLabs gets in on blockchain frenzy with $100m VC and cryptocurrency fund (TechAsia)
