Launching a fund in bear market times: Our first year review

Dear Investors and Friends of SMAPE,

Before we all go out of our offices to celebrate Christmas with our families and loved ones, we would like to take the opportunity to say thank you for all your support and to recap on our first year as a fully-fledged fund.

We successfully launched our fund with a first closing of EUR 5M on 1 January 2023. While we are looking to top up these funds with a little bit more capital in early 2024, we want to stress that we have always aimed to be a small fund with comparably smaller check sizes. It has always been our strategy not to compete with the large funds that are able to make investments of 1M+ per round. Rather, we wanted to keep our options open by sliding in that tiny ticket into a highly competitive pre-seed / seed-stage round.

In addition to providing much needed capital, we also support our portfolio hands-on in a number of ways, such as sparring on token design / token utility / value accrual mechanisms, introductions to other investors, market makers and talking through token launch and listing strategies. We have also been able to connect our portfolio with a range of legal advisors that are able to offer advice on structural and regulatory matters, as well as intellectual property management and protection strategies. Our team members have been active in this space for 6 to 10 years each, hence we also have a range of connections to specific ecosystems and protocols, which we happily open up for our portfolio.

In terms of investments, during the past 12 months, we have screened through hundreds of pitch decks, had more than a hundred introductory and many in-depth follow-on calls. We allocated capital to the best teams working on exciting infrastructure-type projects. The 2023 list includes:

• ELUSIV (zero-knowledge privacy protocol)
• LAVA (RPC for the multichain world)
• LYNC (GameFi infrastructure to launch your Web3 game in minutes)
• NABLA (hyper-efficient AMM for RWAs)
• RDDL (Decentralised physical infrastructure protocol)
• STROOM (Liquid staking derivative protocol for the Bitcoin Lightning Network operating on EVM-based blockchains)
• SUPRA (cross-chain oracle)

In these rounds, we have had great co-investors, such as Anagram, Coinbase Ventures, Hashkey, Jump, Greenfield, HV Capital, Lemniscap, Longhash, Tribe, and many more. We are looking forward to working with our portfolio during the coming years and supporting them in every way we can. Your success is our success.

During 2024, we will continue to invest in great teams with bold ideas. We have a strong appetite for infrastructure-type ventures, which includes but is not limited to:

• L0/L1 blockchains
• L2 scaling solutions
• Cross-chain bridges
• Cross-chain communication
• Oracles
• DAO tooling
• Decentralised identity
• Decentralised storage
• Analytics
• Privacy enhancing technologies

But we are also open to deploying capital in other verticals, such as Decentralised Finance (DeFi), Decentralised Science / Healthcare (DeSci), Decentralised physical infrastructure (DePin), NFT-based business models (not NFTs per se!), and decentralised applications such as SocialFi, legaltech, energy — but we’re always open for making surprise discoveries of completely novel applications (as long as it is connected to Web3 — we don’t do Web2 or other sectors!).

While we’ve come a long way in 2023, we are also conscious about things we could improve. Hence, it is on our New Year’s resolutions list to communicate more widely what we’re up to at SMAPE through our social media channels. In that sense, we wish you a great festive season and are looking forward to continuing to work with all of you on the future of the decentralised Web.

Your SMAPE Capital team