Michael Bodley

<div id="highlights-block_621f7231619aa" class="highlights">
 <ul>
 <li>Nested allows user to mint an NFT that replicates their investment portfolios</li>
 <li>Trades are tracked via smart contracts that update the digital collectible, eliminating the need to mint a fresh NFT with each transaction</li>
 </ul>
 
</div>



A DeFi platform, with a social investing twist that allows users to showcase their investment strategies via NFTs, has raised a $7.5 million round led by billionaire Alan Howard.



Nested Finance intends to use the Series A round to hire staffers, expand to additional blockchains and ramp up its staking capabilities, founder Rudy Kadoch told Blockworks.



Aside from Howard, investors including CMT Digital, <a href="https://kenetic.capital" target="_blank" rel="noreferrer noopener">Kenetic Capital</a> and Republic Capital also participated in the round. 



The startup allows users to mint an NFT (non-fungible token) on a supported blockchain of their choice that uses smart contracts to exhibit their DeFi (decentralized finance) trades on Nested’s platform. Traders — the majority are retail investors — are responsible for covering the costs of minting the NFT.



Supported blockchains now include <a href="https://cms.blockworks.co/?s=avalanche" target="_blank" rel="noreferrer noopener">Avalanche</a>, Binance Smart Chain — now <a href="https://cms.blockworks.co/in-overture-to-decentralization-binance-rebrands-its-blockchain/" target="_blank" rel="noreferrer noopener">known as BNB Chain</a> — and <a href="https://cms.blockworks.co/?s=polygon" target="_blank" rel="noreferrer noopener">Polygon</a>.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Even if you are not a famous person on Twitter, you can create a reputation on Nested,” Kadoch said.&nbsp;</blockquote>



Once minted, the NFT is updated via smart contract to display new trades in real-time, eliminating the need to mint a fresh digital collectible as a trader’s portfolio shifts over time. Users do not connect their Nested portfolio to a centralized crypto exchange; liquidity is provided from the decentralized exchange 0x.



Nested, which allows users to replicate another trader’s portfolio, is betting on surging interest in crowdsourced alpha driven by social media success stories. The idea, Kadoch said, is to bring a clean, streamlined interface to the messy world of DeFi to cut through the crypto noise.



The startup’s founder likened the company to the early days of Coinbase, when the exchange brought crypto trading to the masses.



“Ten years ago, you were able to buy cryptocurrencies, but when Coinbase came, their plan was to democratize cryptocurrencies through a beautiful UX and succeeded with that,” he said.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“This is exactly what we want to do with Nested: Democratize DeFi through simplicity.&#8221;</blockquote>



Nested makes money by charging a nominal fee on each new NFT. When users create an account, they have the option of copying an existing NFT on the marketplace — replicating its trades in the process — or starting from scratch. Traders receive a royalty payout each time their portfolio is copied.



Kadoch said the thousands of DeFi coins trading creates a bottleneck when it comes to breaking into the space.



“Current exchanges are built for [hardcore] users and not for the masses,” he said.



<hr class="wp-block-separator"/>



Correction — March 2, 2022 at 9:45 am ET: The lead investor is Alan Howard, unconnected to the European asset management firm Brevan Howard.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Alan Howard

DeFi Trading Platform Raises Round Led by Alan Howard in Social Investing Push

<div id="highlights-block_62024c154d2fd" class="highlights">
 <ul>
 <li>Before forming Nural, Rabia Iqbal worked for Mubadala, Coatue Management and Morgan Stanley</li>
 <li>The fund of funds plans to back both crypto and venture capital managers, as well as investing directly in tokens and equity plays</li>
 </ul>
 
</div>



A former sovereign wealth fund professional is targeting $150 million for crypto fund of funds under the Nural Capital banner, betting on the Web3 revolution, with backing from one of the industry’s biggest moneymakers. 



Rabia Iqbal plans to close the new firm&#8217;s first fund at the end of February, according to a source familiar with the matter and marketing materials obtained by Blockworks. Iqbal declined to comment.



Nural’s flagship vehicle, First Light Fund, plans to deploy capital to crypto-focused hedge and venture capital managers, along with token investments and direct equity stakes in the blockchain sphere.



“First Light was constructed to maximize alpha, while avoiding the need to actively manage a portfolio of funds, tokens and equity positions,” the marketing materials state.&nbsp;



The firm, which has a presence in New York, Hong Kong and Puerto Rico, is backed by Kenetic Capital, a proprietary investment firm that has invested in BlockFi, FTX and Solana in seed rounds. Kenetic executives Jehan Chu and Tony Gravanis are Nural general partners  — and contributing to a sizable GP commitment for the fund.



Iqbal’s venture is one of a growing number of crypto fund of funds operators to emerge lately, drawn by an abundance of portfolio managers to launch funds in the space in the last year or so. Former Fidelity Digital Funds executive Michael Zinaman is also <a href="https://cms.blockworks.co/sources-fidelity-vet-launching-crypto-fund-of-funds/" target="_blank" rel="noreferrer noopener">attracting the interest of institutional investors</a> for his crypto fund of funds, Dual Worlds.



The source said Nural has an edge in being woman-run and minority-owned, a boon to institutional investors looking to diversify their portfolios — plus having the backing of crypto natives.



Indeed, more than half of the firm’s roster of fund managers come from diverse backgrounds, according to the marketing materials.



<h3 class="wp-block-heading">What’s Next for Nural</h3>



Nural already has its second and third funds on the horizon. The firm is aiming for the second quarter to launch Dawn Fund 1, which is targeting $100 million to make anchor investments with preferred fee terms in emerging managers focused on specific sectors.



Also slated for the spring is Halo Fund 1, shooting for $50 million to serve as a companion fund to First Light 1, including co-investments and follow-up opportunities.&nbsp;



First Light’s starting portfolio includes about 10 investments that are expected to enter the fund with mark-ups on profits, including recently backing the decentralized finance (DeFi) infrastructure startup Quredo. Iqbal has also invested with Simão Cruz’s <a href="https://www.lightshift.capital/" target="_blank" rel="noreferrer noopener">Lightshift Capital</a>.



The fund’s portfolio is earmarked in thirds to established crypto fund managers, emerging funds and token investments, plus direct equity plays.



Part of the appeal, according to the marketing materials: getting access to managers who do not accept new investors or small checks. Iqbal’s pitch to managers, as it turns out, includes getting their foot in the door on co-investments.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“The window to access the best crypto native managers is closing, while minimum investment thresholds are increasing,” the marketing materials say.</blockquote>



It imposes a minimum investment of $1 million, though limited-partners chipping in $3 million get priority on co-investments. The fund has a 10-year lockup, with an optional two-year extension.



Iqbal’s due diligence process includes qualitative and quantitative analysis, including tapping a proprietary fund database. She’s also poised to benefit from Kenetic’s deep access to deal flow.



Iqbal previously spent about four years in business development roles for Dubai sovereign wealth fund Mubadala. Her previous employers include Coatue Management and Morgan Stanley, and she has been personally investing in crypto since 2017.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Kenetic Capital

Newsletter

Blockworks Research