Two former TON +7.63% Foundation members, Ian Wittkopp and Inal Kardan, have launched TON Ventures, a for-profit venture capital firm, with an inaugural fund of $40 million.
Wittkopp and Kardan previously served at the TON Foundation as the director of TON Accelerator and the gaming lead, respectively. With their new fund, the duo aims to invest in startups building on The Open Network, or the TON blockchain.
“The fundraise was very informal over a period where it began to make sense to make the move and go independent, but the full amount was raised around a month ago,” Wittkopp told The Block. The $40 million fund may extend in size if more partners are added later, Wittkopp said. Prior to the TON Foundation, he worked at Ryze Labs (formerly known as Sino Global Capital) as chief operating officer and head of investment.
Wittkopp declined to name the fund’s investors or limited partners but said they are mainly individual private investors who want to support the long-term growth of the TON ecosystem.
TON ecosystem to see ‘billion dollar companies’
TON Ventures invests in early-stage projects within the TON ecosystem. Wittkopp believes that the first wave of Telegram and the TON blockchain adoption will see “billion-dollar companies” formed across decentralized finance, gaming, ad/marketing and regulated financial products utilizing the TON blockchain. “We will invest across the app level in those verticals as well as tooling that makes the development and monetization process for TON ecosystem apps more seamless and higher quality,” he said.
The TON ecosystem has recently gained traction among venture capital firms, mainly due to the TON blockchain’s unique integration with the messaging giant Telegram, as The Block reported recently. With nearly 900 million monthly active users, Telegram’s massive user base is seen as the TON ecosystem’s biggest advantage. Recent games like Notcoin and Hamster Kombat, built on the TON blockchain and accessible through Telegram as mini-apps, have seen strong uptake — though there may be concerns about the presence of bots.
Given the strong momentum, venture firms have been buying Toncoin (TON), the native token of the TON blockchain. Pantera Capital, Kingsway Capital, Ryze Labs and Animoca Brands are all significant investors in the TON token.
When asked about the presence of bots in TON-based games, Wittkopp said that the issue affects web3 games in general and that the TON Foundation is “actively working on detecting bots and cleaning data within The Open League.” According to the foundation’s findings, the percentage of bots remains relatively low, averaging no more than 20%, though this varies by project, Wittkopp said. “As we’ve seen with projects like Notcoin NOT +4.95% , the vast majority of users remain engaged in the community and continue to participate in subsequent team initiatives,” he added.
Wittkopp said web3 products utilizing the TON blockchain and Telegram’s social graph will “become legitimate challengers to established incumbents in verticals like remittance and make headway in banking underbanked segments” in the next 3-5 years.
TON Ventures investments
TON Ventures has already backed over a dozen startups, including Catizen, Tradoor and Evaa Protocol, according to its website. Wittkopp said the firm’s average check size is $500,000 or below for early-stage investments. However, it will also participate in later-stage “strategic” deals, such as large protocols entering the TON ecosystem. The terms and check size on these later-stage deals will be ad hoc in nature, Wittkopp added.
Wittkopp expects the $40 million fund to be fully deployed within a year “given the intense interest from Tier 1 builders that we’ve encountered.”
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