Electric Capital secures $1B to launch new crypto VC funds

Crypto asset management firm Electric Capital has secured a whopping $1 billion in a new funding round Tuesday.

The capital raised will go towards launching two new cryptocurrency VC funds, a $600 million fund that will invest directly in crypto tokens and a $400 million fund that will support startups by purchasing equity.

Founded in 2018, Electric Capital is a venture capital and asset management firm, which has invested in L1 blockchain NEAR, cryptocurrency investment company Bitwise, decentralized exchange dYdX, L1 Blockchain Iron Fish, and more. The company last raised funds in August 2020, raising about $110 million at the time

As per the announcement made Tuesday, the funds will provide these resources to startups working to develop Web3.0 infrastructure, DeFi (Decentralized Finance) protocols, and projects for platforms that support NFTs and DAOs. The firm plans to allocate between $1 million and $20 million in equity and tokens per project.

However, co-founders Curtis Spencer and Avichal Garg revealed that the funds will especially focus on projects with a strong community focus and fair launch token allocation. Garg was quoted as saying in the interview:

“It used to be with token allocations it was very insider-heavy, and now we’re seeing the inverse of that – 60%-65% of token allocated to the community, which is how it should be. People are playing with these token-economic incentives, where if you’re willing to do what’s right for the network – if you’re willing to be locked up for four years or something – you get disproportionate rewards. That presents an opportunity for long-term investors.”

With the latest procurement, Electric Capital has joined the likes of Andreessen Horowitz, FTX, and Paradigm in allocating major funds to the crypto and Web3 industry.

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