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The new Arca venture fund will support startups in the NFT, online gaming, and Web 3.0. markets. The fund is targeting 14 investments this year.
Crypto investment firm Arca, announced on Tuesday the close of a new venture fund. The new fund, dubbed Endeavor, will support companies in the NFT market in addition to companies with operations in blockchain gaming. Furthermore, Endeavor will back companies operating in Web 3.0, music and fan engagement, financial services, and insurance.
Endeavor is Arca’s first foray into startup investments. So far, it has already placed four initial bets in entities, namely, Bitwave, Lattice, BlockchainSpace, and an undisclosed fourth company. Endeavor is targeting ten more investments before the end of the year.
According to David Nage, a member of Arca’s founding team, the firm generated the capital for the fund within weeks. Furthermore, it also currently has an oversubscription above its cap of $30 million. Nage, who will serve as the portfolio manager for the new fund, pointed out its early target investment class. He said:
“Right now, the fund is really focused on seed and SAFT investments, so early-stage valuations that are sub–$40 million in terms of pre-money valuation.”
Apart from the NFT and gaming spaces, Nage also expressed his belief in multi-chain solutions. He told CoinDesk that his firm is fully aware of the fact that everyone is moving into a multi-chain world. Still touching on the multi-chain subject, Nage also added:
“So interoperability as a narrative and as a theme is definitely a part of what we’re going to be looking at in terms of Web 3.0 adoption.”
Nage is a financial services veteran with a concentration in the family office sector. He spent the last ten years focused on direct investments in emerging technology. Nage’s digital assets podcast, Base Layer, offers support and networking to early-stage companies within the space.
Galaxy Digital to Back the new Arca Venture Fund
Galaxy Digital’s Vision Hill unit is backing the new fund, which joins Arca’s flagship hedge fund, as an anchor investor. Arca is already successful with its previous funds – Digital Assets Fund and Digital Yield Fund – which both manage over $500 million. Furthermore, the team now has 35 persons.
Several new funds aimed at early-stage or pre-seed crypto companies are beginning to materialize in recent months. For instance, former ConsenSys executive Kativa Gupta, launched a fund targeted at the NFT market and DeFi.
Venture capital firms injected a total of about $17 billion into crypto firms from the beginning of 2021 to Q3 ending. This figure far surpasses the $5.5 billion from the same period last year. According to The Block Research’s John Dantoni, this trend even continued throughout the summer period, a typically quieter period for dealmaking. In August, the blockchain sector was the beneficiary of almost $2.1 billion in private investments.
Digital assets are a $2 trillion market with about 200 million users, according to a press release from Bank of America. This is why many analysts believe the sector is too large to ignore. We believe crypto-based digital assets could form an entirely new asset class,” they say.