Web3 venture capital firm Hack VC has raised $150 million to invest in early-stage crypto and AI startups.
In a Feb. 20 statement, The New York-based VC firm said that decentralized finance (DeFi), real-world asset (RWA) tokenization and blockchain infrastructure solutions would be the target sectors for most of its crypto-focused investments.
We wrote all about our new $150M Venture Fund (which brings our AUM to ~$420M) in our latest blog. Check it out for more on our vision for the fund, deep conviction in web3, and excitement to support our founders. Read more: https://t.co/zTPDe2mE4V
— Hack VC (@hack_vc) February 20, 2024
Its future investments will focus on projects that make crypto more user-friendly and “capital-efficient” as well as projects that aim to lessen smart contract and protocol hacks, which Hack says are reminiscent of viruses that plagued early internet users in the 1990s.
“Web3 needs an infrastructural paradigm shift across scalability, security, and usability before it is ready for prime time,” Hack said.
“The next Google, Microsoft, Amazon, and Alibaba for Web3 is already here or will launch soon.”
The VC firm added it would also invest heavily in the “Web3 x AI” space, including investment in projects similar to those that it has already funded, such as Jasper AI, a generative AI copilot for enterprises, and Ritual, an AI coprocessor for blockchains.
Hack shared that it had maintained a “deep conviction” for crypto despite a prolonged bear market that saw the total crypto market shrink from $3 trillion to $828 billion from 2021 through 2023, per CoinGecko data.
Hack previously raised a $200 million seed fund in February 2022, aimed at backing early-stage crypto startups.
Hack said its upcoming investments will range from hundreds of thousands of dollars for smaller projects with solo founders to several millions for projects the firm has conviction in.
The VC firm has made over 100 investments and seeded dozens of “unicorns” — startups that reach a value above $1 billion — since it entered into the Web3 space in 2014, including Ethereum infrastructure firm Consensys, layer-1 blockchain Sui and decentralized wireless network Helium
The firm’s total assets under management now sit at around $425 million.
Related: Wormhole raises $225M at $2.5B valuation
Venture funding for Web3-related companies totaled $1.9 billion in the fourth quarter of 2023, recent data reveals.
It marked a 2.5% increase from the third quarter, which was the first time investments into Web3 firms increased since the first quarter of 2022.
One of the largest investments in the fourth quarter came from Lightspeed Faction, which launched a $285 million fund for Web3 startups in November.
China’s state-owned National Engineering Laboratory also announced it would launch a $10 billion Web3 fund in December, focused on virtual reality, the metaverse and nonfungible tokens.
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