Having survived “at least three bull-bear market cycles,” Web3 venture capital firm Hack VC is committed to staying the course, the firm said yesterday as it announced its first venture fund. did. The company said it raised $150 million for the fund “taking advantage of a bear market.”
This venture funding follows Hack VC's first $200 million crypto funding, which was completed in February 2022. Combined with other investment vehicles, the firm's total assets under management now exceed $425 million.
Co-founders and managing partners Alex Pack and Ed Roman said they are used to confronting doubters.
“Each cycle, we have dealt with institutional investors denying the very idea that web3 is investable,” they wrote on the Hack VC blog. “If I had Bitcoin every time, I'd be asking, 'Where's the use case?'” “Aren't cryptocurrencies illegal?” By now we're more than Gary Gensler. You'll be rich. ”
But intermittently, builders continued to build and Hack VC continued to invest.
“Our bias as a company is to invest in technology infrastructure. The technical picks and shovels to help build blockchain are core to what we do,” Roman said. Decryption. “That's because we are developers and technologists ourselves, and we see it as a necessary base layer for building long-term applications.”
Roman declined to name the participants in the venture fund for compliance reasons, but said, “Investors include some of the largest pension funds, endowments and foundations in the United States.”
Hack VC's portfolio companies include re-staking security blockchain Eigenlayer, stablecoin lending platform Goldfinch, enterprise digital asset finance company Bitwave, and Bitcoin staking startup Babylon. (Disclosure: HackVC Decryption. )
Hack VC built its name among techies by hosting developer conferences and hackathons. The gathering has attracted more than 135,000 participants from more than 150 countries in nine years, and its flagship event, Hack.Summit, is scheduled to be held in Hong Kong in April, Roman said.
With a new venture fund, Hack VC declares a new upcycle in the cryptocurrency and Web3 space.
“We are long-standing and unwavering believers in Web3 and are committed to contributing even more capital to the core blockchain technology we have long invested in,” said Pack. Roman wrote.
Roman explained that blockchain security is the company's main focus.
“As Web3 grows, more application developers will join Web3, and they will need to build on a stable technology foundation, one that is less vulnerable to hacking. There will be,” he said. Decryption. “We have seen billions of dollars in losses over the past few years. [hacks]Therefore, increasing blockchain scalability, improving performance, and strengthening security on blockchain are the categories we are most focused on. ”
Beyond security, Hack VC focuses on two other pillars of the Web3 space: DeFi and AI.
“At the moment, DeFi is not as valuable a category as infrastructure, but we think that is likely a temporary phenomenon,” Roman said.
“Look at the history of venture capital, Web2 Venture Capital, embedded finance and embedded FinTech.” [financial technology] There are good reasons for this. Because it's in the payment stream, there are many ways to monetize it, and it's capital efficient. . That's also very [business-to-business] It’s focused, so it’s even more reliable,” he said.
“We think many of these trends and patterns will start to emerge in Web3 as well,” Roman said.
Regarding the recent surge in interest in Web3 games and the sustainability of NFT projects, Roman said that consumer technology (which often struggles to acquire users) is often outside of the Hack VC wheelhouse. Stated.
“It's more focused on kind of technology infrastructure than gaming or consumer facing,” he clarified. “For some investors, investment categories such as infrastructure or DeFi rather than gaming may seem a bit boring, but from an investment perspective these are more reliable businesses. We think it’s more predictable.”
Could NFTs make a comeback?
“While the long tail of NFTs is suffering from price, we think many of them may be essentially worthless at this point,” Roman said. “But 'blue chip NFTs' still have value and some of them are holding up, so they could still come back. It's probably too early to tell.”
Admittedly, the front end of Web3 technology needs a lot of help. According to Hack VC's co-founders, the state-of-the-art of his Web3 today is comparable to his mid-1990s Internet. At the time, a connected world was clearly inevitable, but the technology was scarce, complex, and expensive.
“Like the Internet before Windows 95 and before Netscape, Web3 is largely unusable to existing users and completely unusable to the mainstream. Before Web3 can become a reality, infrastructure across scalability, security, and ease of use is needed. We need a paradigm shift,” said Hack VC. Ready for prime time. ”
Sensing that the next Google, Microsoft, or Amazon is already here, the company wants to “invest as early as possible,” and has given its founders an in-house full-stack technology called Hack.Labs(). We encourage them to provide a platform and bridge the gap. The gap from GitHub to mainstream marketplaces.
