Crypto VCs Raise Over $2.2 Billion in New Capital

According to PitchBook data, crypto VCs have raised over $2.2 billion in new capital through closed funds as of August this year. Recently, at least half a dozen VCs have collectively raised over $500 million in a few weeks. Notable funds include:

• ParaFi Capital: $120 million
• Borderless Capital: $100 million
• Hack VC: $77 million
• Robot Ventures: $75 million

Additionally, Dragonfly Capital is reportedly aiming for $500 million with half already raised, and several funds are actively seeking new capital.

Optimism for Early-Stage Startups

Many funds are targeting early-stage startups, reflecting VCs' optimism about potential innovations, even in challenging markets. Borderless Capital's $100 million DePIN Fund III stands out.

Understanding DePIN

DePINs, or Decentralized Physical Infrastructure Networks, use blockchain technology and token incentives to create connectivity networks like GPU clusters. These models are argued to be more efficient and cost-effective than traditional web2 frameworks.

Borderless Capital’s interest in DePIN is notable as this marks its third fund in this category. The firm’s first DePIN fund was $10 million, focused on Helium, a decentralized wireless network. The second fund, at $20 million, invested in over 35 projects and achieved more than a 2x multiple on investments.

Resilience of DePIN Projects

Gracia suggests that DePIN projects are uniquely resilient to bear markets, with their value deriving from outside the crypto sector. For example, Helium's revenue is nearly independent of the broader crypto market.

Gracia mentioned GEODNET, an RTK network for satellite navigation, which has generated over $1.5 million in ARR, showcasing minimal correlation with the crypto markets.

Unique Tokenomics

DePIN projects employ specialized tokenomics that enhance revenue transfer to token value. This includes buy-back and burn strategies to reduce outstanding token supply, potentially increasing token prices.

Overall, DePIN not only aims to develop infrastructure but also seeks to solve real-world issues and disrupt current web2 industries, according to Gracia, who emphasizes the category's potential.

Borderless plans to deploy its DePIN Fund III fully within the next four years.

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