This Is Not Biden’s Infrastructure Bill

Key Takeaways

• This week’s venture capital was heavily weighted towards infrastructure projects, with some dabbling into NFTs, Gaming, DAOs, and DeFi. Crypto infrastructure projects raised over $1.3 billion, with interoperability and usability as the biggest attractions in the space. Token sales were effective fundraising instruments this week, raising $85 million for 3 protocols. Signs point to a massive influx of capital in future Funding Fridays, as 3 new funds raised $7.9 billion in capital this week.
  
• Active investors this week include Animoca Brands, Alameda, Dragonfly, and FTX.
  
• Deal of the Week: Checkout.com raised $1 billion, valuing the company at $40 billion, in order to build out products that allow for an individual to entirely cut the cord from fiat currencies.

Venture Capital Deals

Torus, now Web3Auth, is an authentication infrastructure technology that simplifies the process of saving, protecting, and using private keys for crypto wallets. The company raised $13 million in a Series A round led by Sequoia Capital India, with Multicoin Capital, FTX, Bitcoin.com, and LD Capital participating among many others. The technology breaks up a user’s key into three “secret shares” and distributes them to the user and across the Torus network, and only requires two of the three shares to be recalled in order to access the wallet. The infrastructure has already integrated with the Binance Extension Wallet and Ubisoft. (Torus Rebrands to Web3Auth, Raises $13M to Simplify Crypto Logins)

Zero Hash is a bank-to-bank, digital assets as a service company that builds infrastructure for customers to use digital assets. The company raised $105 million in a Series D round led by Point72, Bain Capital, and NYCA. The goal with the funding round is to expand its engineering, product, marketing, and compliance teams and enhance support for layer 2 strategies. Zero Hash builds back-end infrastructure that adds a full digital asset suite to banks’ customer experience, currently powering 4% of all Ethereum transactions. (Zero Hash raises $105 million in series D round)

SEBA is a Swiss crypto bank for institutional investors, providing custody, trading, investment management, and lending services. The bank raised $120 million in a Series C round led by Altive, Ordway Selections, and Summer Capital, with Alameda and DeFi Technologies participating among others. Last week, rival Swiss crypto bank, Sygnum, raised $90 million in a Series B. The funds raised will go towards international expansion, hiring, and adding new products and services to its repertoire. SEBA is currently targeting NFT and DeFi products and has recently been whitelisted to participate in Aave’s permissioned pool protocol, Arc. (Crypto bank SEBA raises $120 million in Series C funding)

Itheum is a multi-chain data brokerage platform for users to regain ownership of their personal data and control how it is used in the metaverse. The platform received a $1.5 million seed investment from  Morningstar Ventures to attract developers and begin implementing its roadmap. On Itheum, users can mint their personal datasets as NFTs, create virtual avatars based on their own identities, and trade data in order to gain control of the value that Web2 platforms like Facebook and Google have been profiting from. (Elrond-based “Open Metaverse” Data Platform Itheum Lands $1.5M Seed Round)

Pluang is an Indonesian investment platform that is working to build up Indonesia’s traditional equity and digital asset markets. The company closed a $55 million funding round led by Accel, with additional investors including Axie Infinity’s founders and The Chainsmokers, among others. The funds will be used for expanding the app’s crypto offerings to DeFi, NFTs, and individual crypto wallets for users as the number of Indonesian crypto investors has grown to a larger population than that invested in the traditional stock market. (Indonesian financial super-app Pluang raises $55 million from Accel)

Flip is an NFT marketplace aggregator, allowing users to browse, purchase, and sell NFTs on multiple platforms through one single interface. The company raised $6.5 million in an equity seed funding round led by Distributed Global and Chapter One, with participation from CMS Holdings and a few notable members of the NFT and Crypto communities. The funding will be used to launch the platform in late January or early February. At the moment, 95% of NFT traffic moves exclusively through OpenSea. With major exchanges like Coinbase and FTX building their own NFT marketplaces, the competitive landscape is likely to shift over time, putting interoperability projects like Flip in a very valuable niche. (NFT aggregator Flip raises $6.5 million in seed funding)

Kingdom Karnage is a PvP, turn-based NFT battle game where players battle with teams of NFT characters, and has attracted almost 30,000 NFT holders. The game raised $2 million from Animoca Brands, Kryptomat, and DFG, among others in order to launch a KKT token that will create a play-to-earn mechanic in the game. Players will be able to earn KKT tokens through in-game drops, participating in game development votes, and lending NFTs to players. Play-to-earn mechaincs provide strong forces for a game’s organic community growth, making the game more dynamic and enjoyable. (Kingdom Karnage raises $2M from Animoca Brands, Enjin and DFG to boost GameFi features)

Bribe is a Voter Extractable Value (VEV) protocol that will lock up Aave governance tokens in order to purchase enough voting power to pull an outsized share of liquidity pool yields for its token holders. The protocol closed a $4 million seed round led by Spartan Group, with Dragonfly and Rarestone Capital participating among others. VEV protocols have risen in popularity with the “Curve Wars” of different protocols competing to hold the most Curve governance tokens, thereby controlling voting on how returns are distributed. This is a concerning trend in DeFi protocols with governance tokens, because it counters the idea of decentralization and democratization of the financial world, and instead turns it into an oligarchy. (Pay-to-Play Governance Builds Steam as Bribe Raises $4M)

Conduit is a Software-as-a-Service project that creates backend API infrastructure for financial institutions, fintech companies, and neobanks to build DeFi services into their product suites. The company raised $17 million in a round led by Portage Ventures, with other participants including FinVC, Gemini Frontier Fund, and many others. APIs are integral for accessing and interfacing with blockchain protocols, and there is a lot of valuable opportunity in creating a user-friendly layer over the more technically-rigorous direct node connections to a variety of blockchains. Conduit is building that intermediary layer that will give investors the ability to use familiar financial platforms to participate in DeFi. (DeFi API startup Conduit raises $17 million from Portage Ventures)

ChromaWay is a “relational blockchain” technology platform that has been used for decentralized app (dApp) development in gaming, DeFi, music, and land administration. The company raised $10 million in a funding round led by True Global Ventures 4 Plus. Blockchains are designed to be immutable stores of transaction data, but the data is not stored in an easily-accessible manner. Relational blockchain is a style of creating blocks such that the data stored in them creates a relational database, one of the most user-friendly database structures, making decentralized app (dApp) development easy for creators and users alike. (True Global Ventures Invests US$5 Million Into ChromaWay)

Seashell is a centralized finance (CeFi) investment app that will automatically rotate user’s stablecoins into high-yield, trustworthy DeFi protocols. The company closed a seed round of $6 million to help launch the Seashell app in the first half of this year. The round was led by Khosla Ventures and Kindred Ventures, with Coinbase Ventures, Solana Ventures, and Mark Cuban participating, among many others. The app is designed to be an onboarding ramp for investors to join in on the high-yield opportunities that DeFi offers for money parking. (Mark Cuban and Robinhood’s CEO join $6 million round for high-yield investment app Seashell)

Tokeny is a tokenization platform that allows users to mint and distribute real-world assets as digital tokens on a blockchain. The platforms received $5.7 million in investments from Inveniam, Apex, and K20 Fund. The funds raised will be used to integrate the Invenium pricing platform into Tokeny’s tokenization and legal compliance system to create an end-to-end tokenization and transaction infrastructure with realized liquiditiy. (Inveniam Announces Partnership with Tokeny to Drive Private Asset Secondary Markets)

DeFi Alliance is a crypto startup consulting group that mentors Web3 projects and helps connect them to market makers and liquidity. The group raised $50 million from over 300 investors, with Gemini founders the Winklevoss twins, Crypto.com co-founder Bobby Bao, and OpenSea CEO Devin Finzer as some of the more notable investors. The round will be used to convert DeFi Alliance into the AllianceDAO, expanding its services to include governance, liquidity, advisory, and other startup support services. ($50 million raised to fuel DeFi Alliance’s evolution into a decentralized autonomous organization)

Allbridge is a cross-chain transaction service that has bridged close to $5 billion across, Ethereum, Solana, Fantom, Avalanche, Terra, Polygon, and many others. The protocol received $2 million in a funding round led by Race Capital. Allbridge is looking to double its engineering and business teams’ headcounts as well as building out connections to more blockchains. Interoperability is one of the largest issues facing investors, particularly in the DeFi sector, where moving funds between non-compatible chains costs investors less than desirable gas fees. Bridging infrastructure like what Allbridge is developing is one of the fundamental pillars of the multi-chain future theory. (Allbridge Raises $2M to Expand Cross-Chain Token Bridge)

Near is a developer-friendly layer 1 platform designed for the developer community to easily build Web3 dApps and connect them into a multi-chain network. The protocol raised $150 million in a seed round led by Three Arrows Capital and a16z, with Dragonfly, Jump, and Alameda, among many others. The funds will be allocated towards growing developer activity on Near in order to build new and creative DeFi protocols on the platform. Near uses a bottom-up growth trajectory, where the focus is on building an attractive platform for Web3 developers to build layer 2 applications, and growing organically through being the most usable Web3 ecosystem. (Near Protocol raises $150M to promote Web3 adoption)

Fan Controlled Football (FCF) is a professional football league where the fans vote on real-time decisions for their team, democratizing play-calling, roster management, jersey design, and many other opportunities. The league closed a $40 million Series A round led by Animoca Brands and Delphi Digital. The funds will be used to double the size of the league to 8 teams and minting an NFT collection, the FCF Ballerz collection. The NFTs will be for the 4 new teams, and purchasing the NFTs will grant holders a vote in a series of team management and play-calling decisions. (Fan Controlled Football League Raises $40 Million Series A Round Led By Crypto Investors)

Token Sales

Sarcophagus (SARCO) is a decentralized smart contract execution platform where users can set up instructions to be carried out if the user is ever incapacitated. The company raised $5.5 million in a DAO token sale to venture capital investors Greenfield One, Lattice, Infinite, Hinge Capital, and Blockchain.com Ventures, among others. Votes were conducted through the DAO for approving agreements and vesting schedules, a unique form of venture capital fundraising that we may see more of in the future. Sarcophagus gives its users actions to verify that they are alive. If the actions are not taken, the protocol assumes they are dead or incapacitated, and executes any input smart contracts on the Ethereum network such as will execution, payment settlements, etc. (Crypto Dead Man’s Switch Sarcophagus Raises $5.47M From VCs via DAO)

Project Serum (SRM) is a Solana-based Decentralized Exchange (DEX) that allows users to use on-chain orderbooks with insignificant transaction costs and processing times. The project raised $75 million in a token sale that saw significant participation from notable venture capital firms such as Tiger Global and Commonwealth Asset Management. The sale is still ongoing as Serum expects to raise another $25 million to bring the total raise to $100 million. The funds will go towards a combination of hiring, hackathons, and a new ecosystem fund to continue growing the community. Serum currently has almost $2 billion in TVL with 70 DeFi projects in the ecosystem. (Serum community foundation raises $75 million in token sale from Tiger Global and others)

Solidus AI Tech (AITECH) is an Infrastructure-as-a-Service (IaaS) company offering blockchain and cloud AI computing resources to governments and companies. The company has raised $4.4 million in a private token sale that is leading into pre-sale and public token sale phases through April. The token sale is funding the company’s outfitting of ahigh performance computing data center that will let token holders use AI services while also allowing them to develop blockchain-based applications such as digital payments, healthcare, taxation, voting, etc. (Solidus AI Tech Raises $4.35M in Private AITECH Token Sale)

Crypto Capital Markets

BITRIA is a digital separately managed account and turnkey asset management program platform that provides traditional asset and wealth management products for investors that are looking to diversify into crypto. The company is being acquired by Gemini, a crypto custody and exchange in order to build Gemini into an all-in-one platform for wealth advisors to manage their clients’ assets. Many are expecting M&A to be a big narrative in crypto this year as large digital asset companies try to create a full-service platform for users. (Crypto exchange Gemini pushes into wealth management with acquisition of BITRIA)

New Venture Capital Funds, Ecosystem Funds and Alliances 

KRH is a new venture capital fund headed by Katie Haun, a former partner at a16z heading their crypto investment fund that grew to $2.2 billion by the end of 2021. Haun left the company last month and is now trying to raise $900 million for a new fund with two strategies, splitting the fund into a crypto startup incubator and general growth investments in larger crypto companies, tokens, and other digital assets. KRH has already participated in OpenSea’s Series C funding that was featured in last week’s newsletter. To help kick things off, Haun is bringing along other talent from a16z like Rachael Horowitz, the crypto head of marketing, and Tomicah Tillemann, the former global head of policy. (Haun’s new venture fund lining up investors to raise nearly $900 million)

Andreeson Horowitz, also known as a16z, is a technology venture capital firm with over $18 billion in AUM, becoming notorious in the crypto community for its active and heavy-handed investments in crypto startups. a16z recently disclosed that it raised $9 billion for its new investment strategy, but did not disclose the identity of the investors. The company plans to create three new funds: $1.5 billion in a Bio Fund, $5 billion in a Growth Fund, and $2.5 billion in a Venture Fund. In a statement, the company said that a part of the Growth Fund will be used to continue its current $2.2 billion investment portfolio in the crypto market. (Andreessen Horowitz raises $9 billion for investments in startups)

FTX is one of the largest crypto derivatives exchanges that has famously made many large investments in burgeoning spaces in crypto. The company has now created an official venture capital unit, FTX Ventures, with $2 billion in capital. The new venture unit will be headed by Amy Wu, a former partner at Lightspeed, and will be focused on investing in areas and projects that will increase adoption of Web3 and blockchain technologies across all potential sectors including gaming, social networking, healthcare, fintech, etc. (FTX launches $2 billion venture fund, hires Lightspeed exec to lead)

Deal of the Week

Checkout.com is a British payments processor that services companies such as Netflix, Pizza Hut, Coinbase, Crypto.com, and FTX, among many other major crypto and traditional companies. The startup raised $1 billion in a Series D round that valued the company at $40 billion. Primary investors include The Oxford Endowment Fund, the Qatar Investment Authority, Altimeter, and Franklin Templeton, among others.

Why is this a Big Deal

Checkout.com is one of the world’s largest payment processors, powering $3 billion in transactions in 2021. The company works directly with companies in order to customize their payments solution and integrate it into their infrastructure to allow for fast, cheap, and flexible digital payments. This infrastructure includes a recent addition of cryptocurrency transaction capabilities. The company is looking to grow its position in the US, improve its payment platform infrastructure, and help bridge the gap between fiat currency and Web3. Further efforts in developing the crypto infrastructure include a roadmap for allowing merchants to settle transactions entirely in digital currencies. With a processor as large as Checkout.com, a seamless integration of cryptocurrencies into the fiat payments system could rapidly increase crypto adoption and usage in normal day-to-day transactions. From a more philosophical and sci-fi viewpoint, many in the crypto native community are interested in moving their financial activity entirely on-chain to become independent from centralized governments. Investments in the development of payments infrastructure companies like Checkout.com are moving the digital assets ecosystem towards a future where that interest can be realized. (Checkout.com raises $1B in Series D, bringing valuation to $40B)