Venture capital firm 1confirmation is announcing a new, $45 million fund for investing in cryptocurrency startups.
Led by early Coinbase employee Nick Tomaino, the firm’s first fund, focused on seed rounds, amounted to $26 million.
“We wanted to start off relatively small, prove out the model and raise more capital if the model was working,” Tomaino told CoinDesk in an email. “The model is working well and we had strong support from our existing [limited partner] base to launch a larger second fund.”
He says he’s broadly optimistic about the crypto industry. In a blog post shared with CoinDesk in advance, Tomaino wrote:
“Today, the current total market value of crypto assets is ~$272B and investment/speculation is the only mainstream use case. We think in the next five years, that total market value will surpass $1T as the investment/speculation use case continues to grow and other mainstream use cases emerge.”
1confirmation has invested in a wide array of new companies in the industry, including BloXroute, Tendermint, OpenSea and Commonwealth. The firm invests in both startup equity and cryptocurrency tokens.
While Tomaino declined to detail participants in the new fund, he noted that it is “largely backed by our existing Fund I LPs.” When 1confirmation was first announced, limited partners included: Peter Thiel, Marc Andreessen, Balaji Srinivasan, Brendan Eich, Runa Capital and Real Ventures, among others.
This larger fund will allow for the company to write larger checks while continuing to capitalize on being close to pioneers in the space, Tomaino told CoinDesk.
He wrote in an email:
“For Fund I, our focus was providing early stage capital for founders building infrastructure and middleware for the decentralized web. For Fund II, we’re continuing that focus with larger checks as a result of the larger fund (Fund II checks are generally between $1M and $2M, where Fund I checks were between $250K and $1M).”
In his blog post, Tomaino emphasizes the importance of not chasing the trend so much as investing in “focused, disciplined, mission-driven founders.” Further, he predicts that bitcoin will continue to be the market leader and that ethereum will follow close behind, particularly as the platform for decentralized finance.
“While the story for ETH as a store of value is not as strong as the story for BTC as a store of value and a lot of Ethereum infrastructure challenges remain unsolved, we think that Ethereum as a platform for innovation is here to stay and ETH’s future as Internet money for open, inclusive financial products (aka DeFi) is bright.”