Pantera Capital’s Blockchain Fund Has $1B in Commitments

Pantera Capital has $1 billion in commitments for its blockchain fund and will close the vehicle to new investors in April.

The blockchain-focused asset manager announced in May that it was looking to raise $600 million for the fund. It is available only to qualified purchasers and has a minimum investment of $1 million.

“We’re going to invest twice as much in the market than we anticipated,” Pantera CEO Dan Morehead said during an investor call on Tuesday. “All of our peers are having strong fundraising cycles as well, so all that money will get put to work and drive the market up.”

Pantera will not make new investments in its three previously launched venture funds, as future deals will feed into the new offering. About 40% of the Blockchain Fund’s assets will be allocated toward venture equity. Roughly 30% will go toward early-stage tokens, and another 30% will be allocated to liquid tokens.

“We’ll really be diving into consumer [use cases] a lot more, the intersection of traditional finance and DeFi and also things around the continued global institutionalization of the space,” Pantera partner Paul Veradittakit said on the call.

Investment sizes for the fund’s venture equity deals range from $1 million to about $40 million, typically as part of seed, Series A or Series B funding rounds. Pantera may take between 10% and 20% in the companies. 

Early-stage token investments, which executives described as resembling venture equity deals, range from $1 million to $15 million, also in the earliest funding rounds.

“Our previous venture funds all started returning capital within three or four years and then a lot after five,” Morehead said. “I think this fund will be very similar to that.”

What does the fund hold?

Pantera Blockchain Fund has invested in 44 early-stage token projects and venture equity deals to date. The firm has led or co-led 26 deals and more will be announced in the coming months.

Executives highlighted the company’s investment in Aurora, a bridge designed to provide Ethereum compatibility and scalability for smart contracts on the NEAR blockchain that raised $12 million in October, as well as South Africa-based cryptocurrency exchange VALR which raised $50 million last week. 

Pantera is also leaning into what executives noted are among the hottest crypto segments: blockchain gaming, NFTs and the metaverse. It invested in Web3 gaming infrastructure platform GuildFi’s $6 million seed funding round in November. 

“The gaming sector is going to be a huge sector for years to come in this space,” Veradittakit noted. “It’s very practical, is pretty easy for people to use and simpler to understand than things like DeFi.”

Pantera is also seeking to invest in NFT (non-fungible token) marketplaces, platforms and developer tools to make it easier to build within the growing space.  

“Where we see this market going with NFTs is not only representation of digital art, but also representation of video, music…and then of course into video game assets too,” Veradittakit said.

Where is the market headed?

Morehead reiterated previous comments that the crypto asset class is “the most asymmetric trade” he’s ever seen.

When asked about market cycles, the CEO said crypto investors selling ahead of filing taxes has in part led to recent price dips. 

Morehead previously predicted that bitcoin would hit $115,000 by August 2021. The asset’s price was about $42,200 at 10:30 am ET Wednesday, according to data compiled by Blockworks — up 9% from 24 hours ago. The executive noted that he expects prices to be “way higher” a year from now.

“There’s kind of a knee-jerk reaction to say it’s a bubble,” Morehead said. “You can’t have a bubble that almost nobody owns. Ninety percent of major institutions don’t have a real, direct position in blockchain yet.”

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