OP Crypto’s $100M Fund-of-Funds to Support Early-Stage VCs

  • Despite current market challenges, OP Crypto is launching a fund-of-funds designed to support aspiring fund managers of early-stage crypto startups
  • OP Crypto’s latest fund follows the success of its venture capital fund backed by Galaxy Digital and Digital Currency Group.

Venture capital firm OP Crypto, founded by former Huobi executive David Gan, announced on Thursday that it has launched a new vehicle for emerging fund managers focused on early-stage digital asset investments.

Dubbed OP Fund of Funds I (OP FoF I), the investment vehicle will target managers with vertical expertise in blockchain infrastructure, DeFi, NFT, metaverse, and gaming, among other areas. Emerging managers are those with limited experience who are responsible for managing assets below a certain monetary threshold.

Despite falling venture capital interest and a shrinking market, OP Crypto said its latest fund raised $50 million in commitments from FTX subsidiary LedgerPrime and investment firm FJ Labs. The new fund is trying to aim for a hard cap of $100 million, according to a statement.

Although not typical of crypto, funds of funds are a type of investment strategy that operates as a pool of capital that invests in other funds with the aim of reducing risk by expanding the diversity of investment vehicles to its credit.

Founded last year, the British Virgin Islands-domiciled venture capital firm seeks to invest in the fintech and blockchain technology sectors both indirectly, through its latest fund, and directly with another dubbed Venture Fund. I.

The latter fund, which raised a significant investment of $50 million from participants in March, is backed by some of the biggest players in the industry, including Galaxy Digital and Digital Currency Group, as well as institutional investors Bill Ackman and Alan Howard.

Lucas He, COO of OP Crypto and another Huobi alumnus, will be the general partner of OP FoF I. A veteran of the crypto space since 2013, he previously held fund-of-fund positions at Huobi Capital and State Street, according to his LinkedIn.

Meanwhile, OP Crypto founder David Gan will assume the role of chairman and advisor of the fund with no commitment conflicts, as it is expected that Gan will always devote his attention to Ventures Fund I, according to the statement.

Investors in OP FoF I will have access to managers’ deal flow and have the ability to double down on specific projects via co-investment opportunities, OP Crypto said.

“We plan to be a franchise of different native crypto funds,” he told Blockworks in an email discussing OP Crypto’s investment strategy. “Beginning with Direct Venture Fund I and moving on to FOF I, we plan to launch many successive fund vehicles down the road, serving different objectives and risk appetites for our investor base.”

Asked about OP Crypto’s risk management approach in the context of over-leveraged hedge funds, investors and liquidity providers, he told Blockworks that his firm has taken a “disciplined approach.” To achieve this, he said OP Crypto is slowly rolling out – having only invested around 20% of its total operating capital last year – while also looking to double down at reasonable valuations amid the slowdown in the market. market.

For OP FoF I in particular, he added that the fund will try to support managers who also share this “disciplined” and “focused” approach to deployment.


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  • Sebastien Sinclair

    blockages

    Senior Reporter, Asia News Desk

    Sebastian Sinclair is a senior reporter for Blockworks operating in Southeast Asia. He has experience covering the crypto market as well as some developments affecting the industry including regulation, business, and mergers and acquisitions. It currently does not hold any cryptocurrency. Contact Sébastien by e-mail at [email protected]

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