The last few months have seen a wave of VC firms dedicating entire multimillion-dollar funds to the advancement of technology in the crypto, blockchain and web3 space. Most recently, Dragonfly Capital, a crypto-centered investment firm, closed its third fund for an oversubscribed $650 million. Earlier this year, Electric Capital raised $1 billion to back crypto startups and buy tokens; Inflection raised $40 million for its second crypto-focused early-stage fund; and Hack VC raised a $200 million crypto seed fund.
By comparison, the $5 million web3/crypto fund that's just been launched by New Zealand-based VC Global from Day 1 (GD1) might seem like small potatoes. However, GD1 Crypto Fund 1 is notable because it is the country's first dedicated fund in an industry that can potentially be a space both for New Zealand startups and local investors to win.
New Zealand startups in all aspects of the web3 space are emerging as major players, from Easy Crypto, a platform for buying cryptocurrency, to Veve, a company that makes and sells NFTs for enterprise and recently signed a deal with comic book giant Marvel, to Fluf World, a metaverse space made up of 3D-animated rabbits with their own personalities. These startups, and others like them, are largely backed by offshore investment, but GD1 wants New Zealand-based investors to have access to what it sees as "the future of the internet," according to Nawaz Ahmed, an angel investor and crypto veteran who recently joined GD1 as general parter for this fund.
"This is a missed opportunity for New Zealand-based funds and one we’d like to be the first to explore,” said Nawaz.
This means that GD1 Crypto Fund 1 will not only serve to give New Zealand startups a boost, but also to allow local investors to get involved in overseas startups in the hopes that some of those returns will make it back to the startup ecosystem in New Zealand. The fund is made up largely of local angel investors and family offices, as well as a few institutions and international limited partners.
"The point of the fund is to support the local ecosystem while also being able to invest in great offshore opportunities and be able to provide our LPs with the best opportunities across the world," said Nawaz.
The fund will invest $100,000 to $200,000 in about 25 to 30 pre-seed to Series A companies across decentralized finance, decentralized autonomous organizations, NFTs, web3 and crypto infrastructure, according to Ahmed.
GD1 has already invested in two portfolio companies for this fund, one of which is a New Zealand company, said Ahmed. The fund's first close is set for June and GD1 expects it to be oversubscribed, with early commitment from international LPs with a track record in making good internet-based investments, according to the firm.