Top 10 VCs investing in blockchain companies at the pre-seed stage
The blockchain industry is gaining popularity among venture capitalists. Let’s look at the numbers:
- In 2021, investment in crypto and blockchain surged to $30 billion.
- In H1 2022, VCs poured $14.2B into crypto, according to the recent KPMG report.
- That compares with $8.2 billion in 2018, $5.6 billion in 2019 and $5.5 billion in 2020.
The technology behind web3 is still in its early stages, with many startups yet to prove their worth. However, with the recent influx of capital into this space from both institutional investors and individual angel investors, it’s clear that there’s a lot of excitement around web3 technologies.
Why do VCs invest in crypto?
First of all, because of technology. Globally, we see an increase in the level of recognition for the potential role of crypto and blockchain technology in the development of the internet, finance, digital art, gaming, commerce, identity, cyber security, and more. It’s still early to talk about mass adoption, but we’re moving in that direction.
Secondly, the money. Many VC firms see the long-term growth of crypto, and they don’t want to miss out on what may be the biggest investment opportunity of our time. Despite the market volatility and lots of security issues in the sector, VC firms are confident in blockchain and cryptocurrency and are ready to assume additional risk.
The fact that VCs are investing in web3 startups even during the bear market supports the theory that crypto winter is a time to focus on building good products and successful businesses that will win in the long term.
What kind of crypto startups are VCs looking for?
VC firms are looking for “picks and shovels” of web3. In other words, web3 infrastructure and software. These include L1 and L2 blockchains, security tools, web3 social networks, marketplaces, x-to-earn apps, and more.
They are also investing in crypto unicorns — VC-backed companies that have at least a billion dollars in valuation. Crypto unicorns are focused on the nuts and bolts of the new economy: buying and selling, digital infrastructure and analytics, creator economy and other new digital services.
It seems like every day, a new web3 company is emerging and catching the attention of venture capitalists. But who are these companies that invest in crypto startups?
We’ve done some research, and here are the top 10 VCs investing at a pre-seed stage in web3 companies over the last 12 months, as reported on Crunchbase when querying the categories of:
- Blockchain
- Cryptocurrency
- Ethereum
- Bitcoin
Let’s take a look.
Outlier Ventures
Year Founded: 2014
HQ: London, England
Learn more: https://tapx.link/ov
Outlier Ventures has been backing web3 founders since 2014 and was one of the first VC firms dedicated to investing in the emerging crypto ecosystem.
Their portfolio includes notable projects across DeFi, NFTs and blockchain infrastructure with a focus on emergent Open Metaverse use cases such as NFT-based play-to-earn games, augmented reality and more.
Their Base Camp and Ascent programs are constantly looking for founders to accelerate the open Metaverse thesis by launching token networks.
The OV team provides a proven framework for growth while weaving together a global network of over 1,000 of the world’s leading Web 3 founders, protocols, and VCs to form an ecosystem of mentorship and investment.
This year, OV invested in several metaverse projects including Umazi, BmyBit, Sgnal, and Versify Labs.
Y Combinator
Year Founded: 2005
HQ: Mountain View, California, United States
Website: https://www.ycombinator.com/
Y Combinator is a startup fund and program aimed to support founders throughout the life of their company.
Twice a year they invest $500,000 per company in a large number of startups. Since 2005, YC has invested in nearly 3,000 companies including Airbnb, DoorDash, Stripe, Instacart, Dropbox, and Coinbase.
According to Coinbase, in 2022 YC invested in Dime, Blocknom, Message Party, NFTScoring, Trendex, Zoltar Labs, Soon, and Filta at pre-seed.
YC has programs and resources to support startups and provide them with resources to scale and grow. These include Startup School, The YC batch program, Growth Program, and more.
Flori Ventures
Year Founded: 2021
HQ: San Francisco, California, United States
Website: https://www.floriventures.com/
Flori Ventures back founders and leaders who tap into financial innovation to solve real-world problems at scale.
Flori grew out of the mission-driven community around Celo, an open blockchain created to solve real-world challenges.
They support founders who use blockchain technology to tackle two of the biggest challenges of our time: climate and access to the financial system.
They have already invested in over 100 startups including Climate Guardians, Data Union, HeyMate, Talent Protocol and more.
Antler
Year Founded: 2017
HQ: Singapore
Website: https://www.antler.co/
Antler is a global early-stage VC enabling exceptional founders to start companies that matter.
They have already supported 3,000+ aspiring founders across different industries including AI, robotics, drones, fintech, proptech, and healthtech.
According to Crunchbase, in 2022 they’ve invested in Zero Code, Defiance Games, Peccala, SuperHedge, and BitVision at pre-seed.
Antler enables founders to build impactful startups by helping form complementary co-founder teams, supporting teams with deep business model validation, and providing a global platform for scaling startups to maximize their impact.
Shima Capital
Year Founded: 2021
HQ: San Francisco / Los Angeles, California, United States
Website: https://shima.capital
Shima Capital is an early-stage global venture firm focused on supporting cutting-edge blockchain startups.
Their portfolio includes leading L1 and DeFi companies such as Polkadot, Algorand, Synthetix, 1inch, Splinterlands.
All Shima investments are early-stage projects with a big vision, a focus on disruption, and a clear path towards adoption.
The firm adds value to portfolio companies by introducing them to tier 1 VCs, managing their talent acquisition program, supporting the validator process, and providing general business development advice.
Hashed
Year Founded: 2017
HQ: Gangnam-gu, Seoul
Website: https://www.hashed.com/
Hashed is a team of blockchain experts and builders based in Seoul and Silicon Valley.
Hashed believes that decentralization has the power to transform not only the global economy but the very core of the internet.
They are looking for blockchain geeks, dreamers and trendsetters passionate about navigating the ever-complicated cross-section of engineering, game theory, and economics.
To date, they have backed over 40 visionary founders all over the globe who are pioneering this industry including Klaytn, Kakao’s global public blockchain project, LINE Corporation’s blockchain project LINK, as well as Nifty Island, Jia, and Afropolitan.
CV Labs
Year Founded: 2017
HQ: Zug, Switzerland.
Website: https://www.cvlabs.com/
CV Labs is an early-stage venture capital investor focusing on global startups that build blockchain technology solutions.
In order to recognize the most promising minds in blockchain, CV VC looks for disruptors, pioneers, and mavericks alike who have successfully unlocked the potential of decentralised technology.
Their 10-week intensive Incubation Program aims to empower startups with the expertise of founders and mentors.
Besides funding, the Incubation Program provides a select group of startups with a global network of experts and mentors, online courses with in-person physical bootcamps, and relevant knowledge in the field.
In 2022, they invested in 3 blockchain startups at pre-seed — Mazzuma, Pravica, and HouseAfrica.
Velocity Capital Advisors
Year Founded: 2013
HQ: London, England
Website: https://www.velocity-group.com/capital/
The Velocity EIS Technology Fund invests in exciting, innovative, technology-enabled businesses.
Along with operational support, Juice Ventures’ non-dilutive User Acquisition funding supercharges investor returns and applies the founders’ expertise in ‘above the line’ marketing to investee companies.
The company works to incubate, accelerate and grow big, simple commercial ideas that provide creative solutions that are unique and inspiring.
Stacks Accelerator
Year Founded: 2014
HQ: New York, New York, United States
Website: https://stacks.ac/#program
Stacks Accelerator is a 3-month program focused on investing in outstanding startup teams building on the Stacks Blockchain, a network that makes Bitcoin programmable.
There are over 400 apps and teams working on important and interesting problems on the network ready to guide and support each other.
The Stacks Accelerator program is modeled after the most effective global programs and built by accelerator veterans to bring founders exactly what they need and when they need it. The program includes workshops with experts and mentors, Demo Day with investors & media, and a lifetime Alumni Community Membership.
Arcanum Capital
Year Founded: 2013
HQ: Dover, Delaware, United States
Website: https://www.arcanum.capital/
Arcanum Capital is a seed-stage venture capital firm that supports forward-thinking, enterprising teams developing blockchain networks and decentralized applications.
Arcanum fund provides Seed and Series A financing to blockchain companies in emerging markets, with a primary focus on India. One of the Fund’s strategic investors is Polygon Co-Founder Sandeep Nailwal.
With the abundance of exciting projects emerging from the region, the Arcanum portfolio managers are confident they will deploy the Fund’s capital quickly and effectively.
You may be wondering why there’s no mention of some other crypto VCs like A16Z on the list. Good question. It appears from the reports on Crunchbase that A16Z invested at Seed stage and up, and over the past 12 months have made 16 investments ranging from $5m to $450m.
We’ll cover A16Z and other VCs investing in blockchain companies at the seed stage in our future blogs.
Key Takeaways:
- Blockchain technology is a growing field, with lots of potential to change the way we do business.
- The blockchain industry is still in its infancy, so there are plenty of opportunities for investors who want to get in on the ground floor.
Here are some of the top VCs that have invested in blockchain companies:
- Outlier Ventures
- Y Combinator
- Flori Ventures
- Antler
- Shima Capital
- Hashed
- CV Labs
- Velocity Capital Advisors
- Stacks Accelerator
- Arcanum Capital
3. These are early-stage venture capital investors focusing on blockchain startups that build products and services with real-world utilities.
