Valkyrie Establishes $30m Venture Fund, Investing in Crypto & Web3 Projects

Crypto asset management firm Valkyrie is launching a new financial investment product. The Tennessee-based company announced on Tuesday that it is moving into venture capital with plans to raise a $30 million fund by investing in early-stage startups in Israel.

In April, the firm hired Lluis Pedragosa, a renowned venture capital expert, to lead Valkyrie Ventures. Pedragosa is a veteran of Israel’s VC scene who is the founder and former partner of cybersecurity-oriented Israeli VC Team8, which focuses on enterprise technologies, artificial intelligence, and fintech.

Valkyrie will geographically focus on startups in Israel and the US, with plans to invest in startups seeking to bridge the gap to web3 for average users.

Filling in the gap between the ordinary web2 user experience and connection to web3 assets is the path to the next billion users of blockchain, Pedragosa said.

Besides efforts to back firms developing web3 user experience, Valkyrie Ventures fund also plans to invest $250,000 to $1 million in behind-the-scenes infrastructure firms building secure blockchain infrastructure and building crypto products.

Pedragosa said Valkyrie has already invested in a Web3 startup, "Bunches, " which is developing a messaging platform for wallets.

The company added that Valkyrie will provide Israeli startups access to the U.S. market. Valkyrie is a Tennessee-based firm with a largely U.S.-based network of contacts and clients that will help “bridge the gap” for Israeli startups, Pedragosa explained.

The Valkyrie fund seeks to raise somewhere between $30 million and $50 million. The announcement comes amid a significant downturn in the industry. The current market turbulence has prompted several firms to slash their valuations, declare bankruptcy or even close shops. Pedragosa said that is not a huge concern. He said market bears have historically been a time for building in the industry.

Crypto Venture Capital Funding Surging

Valkyrie’s announcement comes at a time when several firms continue to splash capital into crypto venture funds.

Last year, venture capitalists bet big on crypto startups, investing more than $27 billion worldwide as of late November, more than in the past 10 years combined.

Many of the investments were facilitated by the venture capital arms of crypto firms, businesses whose continued growth depends on the expansion of the ecosystem.

Likewise, Coinbase and other crypto firms envision that blockchain technology will lead to the evolution of the internet and how the world moves from Web 2.0 to Web5.

The dominance of big tech over internet use and its control over personal data has led to calls for the net's decentralization. The third iteration of the internet – Web3 – will be defined by open-source technology, using blockchain technology to be permissionless and trustless.

In January, FTX crypto exchange launched a $2 billion venture fund, one of the largest investment vehicles to date, aiming to tap into the crypto market's startups.

Coinbase Ventures, the investment arm of the Coinbase crypto exchange, is backing firms building infrastructures like blockchain network services, and crypto financial services, including metaverse, where users buy and sell digital goods for their virtual lives like NFTs.