Photo credit: Namecoin.
Global venture capital and accelerator network [SparkLabs] announced its latest initiative today: SparkChain Capital, a US$100 million fund aimed at tapping the current craze for all things cryptocurrency-related.
The new fund has a dual purpose. The majority of the capital will be used to make equity investments in promising startups in the blockchain space. The remainder will be used to buy cryptocurrency, including digital tokens issued by companies as part of their initial coin offerings (ICOs).
It is also planning to run its own ICO later in the year.
SparkChain is headed up by Joyce Kim, a co-founder and former director at Stellar – the San Francisco-based non-profit that just teamed up with IBM and a number of major banks to launch a global blockchain platform for rapid cross-border transactions.
Kim tells Tech in Asia that the fund will primarily target participation in series A rounds, with each investment in the range of US$1 million to US$3 million. The aim is to invest in around 15 to 20 companies in total, with some funds earmarked for follow-on investments in those same startups.
According to a press release, SparkChain will additionally have “a small targeted holding of actual cryptocurrencies,” which it “will not actively trade.”
“We are presently capping our investments into cryptocurrency and ICO holdings at 10 percent of initial fund capital,” says Kim. “We will be able to invest in ICOs as well, but as expected, potential ICO investments will go through a very rigorous vetting process.” Investment decisions relating to cryptocurrency and digital tokens will be made by evaluating numerous factors and keeping a close eye on the overall state of the market, she adds.
As to why SparkChain will engage in trading these cryptocurrency holdings, Kim says that this is not a focus for the fund at present. “There are many crypto hedge fund options for investors out there, and this isn’t our team’s strength,” she says. “We’re experienced in helping companies grow and make an impact in the world.”
The rationale behind the 90/10 split is that Kim believes the fund will benefit from this hybrid investment strategy. “We are dedicating the bulk of the fund to making equity investments in companies and entrepreneurs, because we believe will find the best and brightest teams committed to building companies that will be successful in the long term and help avoid many of the flash in the pan projects,” she says. “The ICO market is very exciting, but we think it is still too young and volatile to be dedicating a larger portion of assets to it.”
SparkChain is slating its own tokensale for some point later this year. “The ICO will allow a wider audience that is crypto-interested to invest in a fund that is managed by seasoned venture investors with deep knowledge of the blockchain space.”
This post SparkLabs gets in on blockchain frenzy with $100m VC and cryptocurrency fund appeared first on Tech in Asia.
from Tech in Asia https://www.techinasia.com/sparkchain-launch
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