Multicoin Capital Crypto Fund Receives Investments From Andreessen And Others

Multicoin Capital, an asset management company based in the United States that focuses on virtual currencies has managed to raise funds from various institutional and individual investors. According to Kyle Samani, the managing partner and co-founder of the asset management firm, this included Marc Andreessen, the influential venture capitalist.

“The past six months have been absolutely incredible. Since launch, there’s been a ton of interest in Multicoin Capital, validating the overwhelming need for professional fund managers that understand the market intimately,” Samani said in a statement.

The asset management firm has a funding target of approximately $250 million to be reached by the close of June this year and which will be directed to the flagship virtual currency fund that currently boasts of around $50 million. Unlike other digital currency funds who invest for periods of at most a few months, Multicoin Capital takes a long-term view. According to Autonomous NEXT, Multicoin Capital is among 225 virtual currency funds that are employing seven strategy types and whose combined assets are estimated to be between $3.5 billion and $5 billion.

Besides the founder of VC firm Andreessen Horowitz, Marc Andreessen, others who invested in Multicoin Capital include PayPal’s first chief operating officer, founder of Craft Ventures and enterprise social network platform Yammer, David Sacks and the Color Genomics’ co-founder, Elad Gil. VC firms that invested in Multicoin Capital include Passport Capital and Vy Capital.

The funding of Multicoin reflects a growing trend where investors and partners in venture capital firms are putting money into virtual currency funds as individuals. This is because traditional VC firms possess investor agreements which prevent them from putting money in high-risk assets and this includes digital coins.

According to Samani though investing in cryptocurrencies and in traditional startups can be said to be similar, there are differences that exist. One of these is the fact that the liquidation of virtual currency assets happens sooner compared to traditional private equity. The fact that digital assets areopen source has also changed how they are approached by investors. Per Samani the virtual currency fund sector is ripe for consolidation. Samani is also of the view that sub-scale funds will experience trouble surviving.

This comes less than a month since Multicoin Capital joined the partner ecosystem of Apex Token Fund. By joining the ecosystem Multicoin Capital is hoping to benefit by raising the number of virtual currencies it has invested in as well as increasing reliability with regards to upside potential.