The venture capital industry appears to be preparing for a portfolio rebalancing in 2024, with investors increasing their exposure to digital assets in the next bull market. For example, Blockchain Capital closed two new funds this week, with $580 million in funding set to go toward crypto gaming and decentralized finance projects.
Likewise, SkyBridge Capital, Atlas Merchant Capital and Vector Capital were among the final bidders to acquire SVB Capital, the venture capital arm of failed Silicon Valley Bank. SVB Capital is reportedly a backer of other major venture capital firms in the cryptocurrency space, including Sequoia Capital and Andreessen Horowitz.
At the same time, Bitcoin-based investment products from mainstream financial giants are also growing in popularity. Japan’s largest investment bank Nomura Securities, through its subsidiary Laser Digital, has launched a new Bitcoin (BTC) fund aimed at institutional investors looking to meet their Bitcoin investment needs.
A growing number of newcomers are also attracting funding. Web3 startup Bastion has disclosed $25 million in seed funding to connect Web3 infrastructure with enterprise technology. The round was led by Andreessen Horowitz, Laser Digital Ventures (Nomura’s crypto venture capital arm), Robot Ventures, Aptos Ventures and Alchemy Ventures.
This week’s Crypto Biz explores SVB Capital’s bid, Blockchain Capital’s new fund, Hut 8’s merger with Bitcoin USA, and Citigroup’s private blockchain.
Scaramucci leads bid for Silicon Valley Bank’s venture arm: report
SVB Financial Group, the former parent of Silicon Valley Bank, is close to a deal that will see the institution sell its venture capital arm, SVB Capital. Anthony Scaramucci’s SkyBridge Capital and Atlas Merchant Capital are competing with San Francisco firm Vector Capital in the final stages of the bidding process, The Wall Street Journal reported. Sources said SVB’s venture capital arm could be sold for $250 million to $500 million, but cautioned that a final sale was not guaranteed and would still require review by a committee of creditors. SVB Capital makes a wide range of investments, including backing other major venture capital firms such as Sequoia Capital and Andreessen Horowitz. The company is not part of SVB’s Chapter 11 bankruptcy proceedings and a sale decision is expected in the coming weeks.
Hut 8 gets Canadian Supreme Court approval for U.S. Bitcoin merger
Canadian Bitcoin mining company Hut 8 is set to complete its planned merger with U.S. Bitcoin following final approval from the Supreme Court of British Columbia. Hut 8 and US Bitcoin announced the move in February 2023, subject to shareholder and regulatory approval. After this merger, the two companies will form Hut 8 Corporation (or “New Hut”), which will become a U.S. public company. Hut 8’s initial announcement highlighted that the merger would open up 825 megawatts of capacity across six different Bitcoin mining and data center facilities. New Hut also plans to list on Nasdaq and the Toronto Stock Exchange under the ticker HUT.
Blockchain Capital closes fund totaling $580 million to invest in crypto games and DeFi
Venture capital group Blockchain Capital announced the completion of two new funds, totaling $580 million, to invest in infrastructure, games, decentralized finance (DeFi), and consumer and social technologies. The funds will operate as Blockchain Capital’s sixth early-stage fund and first “opportunity fund,” which will serve as an entry point for companies that have already attracted capital. The funds will reportedly be split, with $380 million earmarked for early-stage funds and $200 million earmarked for opportunity funds. The company did not specify which projects would be prioritized by the investment fund; however, the spokesperson noted that the company has no plans to invest in AI-related projects or act as a hedge fund.
We are excited to share the closing of two new funds – our sixth early-stage fund and our first opportunity fund.
Totaling $580 million, they help strengthen our commitment to leading the global transition to decentralized, blockchain-based systems. ↓https://t.co/Vr2uYnGlF7
— Blockchain Capital (@blockchaincap) September 18, 2023
Citi token service will provide payments and liquidity to institutional clients
Institutional clients can now access cross-border payments, liquidity and automated trade finance solutions through Citi Token Services, Citi’s private blockchain. According to the financial giant, its Citi Treasury and Trading Solutions are licensed in more than 90 countries and have completed two pilot projects. It has partnered with Danish shipping company Maersk and an unnamed canal authority on an initiative to make instant payments to service providers via smart contracts, reducing transaction processing time from days to minutes. The service replaces bank guarantees and letters of credit, the statement said. The second pilot enables clients to transfer liquidity between Citi branches, purportedly reducing “friction associated with service window deadlines and gaps.” Citigroup was one of the large financial institutions participating in a proof-of-concept led by the New York Federal Reserve Bank, which concluded in July.
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