Shalini Nagarajan

Venture capitalist Tim Draper has launched a venture studio to boost budding crypto and Web3 startups.



Alon Goren, board member of projects like LunarCrush and Ownera, and David Bleznak, who recently worked on Coinbase&#8217;s institutional offerings, join Draper as founding members of the new studio called Draper Goren Blockchain (DGB).



The team indicated that their launch is strategically timed to align with bear market conditions, as they believe many crypto projects will benefit from support to thrive and succeed, according to a <a href="https://www.dgb.vc/">statement</a> published Sept. 20.



“It’s a cliche that bear markets are a time for builders to build, but that means there are incredible projects currently being developed that are in need of capital and support,” Draper said.



Draper is a well-known venture capitalist and entrepreneur, recognized for his contributions to the tech and crypto industries.



In the early 1980s, he founded Draper Associates, a venture capital firm known for its successful investments in prominent tech companies such as Skype, Tesla and Baidu.



Still, he was one of the early backers of the blood-testing startup Theranos, which, as we all know, turned out to be a <a href="https://www.ft.com/content/ccaf2dbd-473f-4b1f-8724-79ca735bb07b">big flop</a>.



In 2014, he <a href="https://blockworks.co/news/us-government-dumps-bitcoin-silk-road">bought</a> around 30,000 bitcoin (worth around $798M at current prices) in a government auction for roughly $18 million, making him an early bitcoin investor.



“With DGB, we are reinforcing our dedication to amplify crypto projects that are advancing the industry in anticipation of an influx of millions of new users and institutions in the coming months and years,” he said.



Draper <a href="https://blockworks.co/news/tim-draper-loves-decentralized-world">told</a> Blockworks last year that his firm chose not to invest in FTX and BlockFi.&nbsp;



Despite the challenges faced by the crypto industry in 2022, he emphasized that his investment strategy remained unwavering, as he continued to hold a strong affinity for the decentralized realm.



In a video <a href="https://twitter.com/AlonGoren/status/1704552918819684657">posted</a> on X, DGB founding member Goren was optimistic about the crypto space despite industry uncertainties, emphasizing the trio’s long-term commitment.



“We&#8217;re in the midst of a crazy bear market for all sorts of circumstances. But we were here early, and we&#8217;re going to be here often,” he said.



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Tim Draper

Tim Draper ventures forth as bear market bites

Ornella Hernandez

Funding for Web3 and blockchain companies may be steadily decreasing quarter over quarter since last year, but one venture capitalist remains as bullish as ever.&nbsp;&nbsp;



Blockworks recently caught up with Tim Draper, founder of early stage venture capital firm Draper Associates, while at <a href="https://blockworks.co/news/miami-art-week-but-crypto" target="_blank" rel="noreferrer noopener">Miami Art Week</a>.



Draper is known to be an advocate of decentralization and blockchain technology and a bitcoin (BTC) maximalist.&nbsp;



His most recent tweet in support of bitcoin called for governments to “design software to tax businesses operating in a bitcoin walled garden.” He also called out the <a href="https://blockworks.co/news/gensler-failed-ftx-fraud" target="_blank" rel="noreferrer noopener">FTX crypto exchange</a> for being “centralized around one person.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Bitcoin is decentralized. FTX was centralized around one person. Decentralized currency is the great opportunity we have for economic evolution. Governments need to design software to tax businesses operating in a bitcoin walled garden so they have more <a href="https://twitter.com/hashtag/trust?src=hash&amp;ref_src=twsrc%5Etfw">#trust</a> in <a href="https://twitter.com/hashtag/bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#bitcoin</a>.&mdash; Tim Draper (@TimDraper) <a href="https://twitter.com/TimDraper/status/1599085753379979270?ref_src=twsrc%5Etfw">December 3, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Draper told Blockworks his firm opted against investing in FTX and lender BlockFi. He responded to other questions via email.



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



Blockworks: How has Draper Associates’ capital deployment and investment strategy been affected by the various fallouts that the crypto industry dealt with this year?



Draper: No change. We still love the decentralized world, the Bitcoin Economy, etc. In fact, FTX should clarify that our strategy is sound. FTX was completely centralized (like the central bank), and that puts people’s money at risk. We, of course, still look for new industries to transform, new entrepreneurs who have great vision and new worlds to explore.



Blockworks: Given the potential fraud at FTX, what do you think is the future of centralized finance?



Draper: Gone, and it can’t be gone too soon. I still don’t know why people want to keep their money in dollars, pesos, naira, etc. Fiat currency is centralized too!



Blockworks: You’ve expressed your enthusiasm about the potential of Bitcoin, but how bullish are you on the metaverse and gamified experiences and the companies behind them?



Draper: It all depends on the application. I like that a lot of our world, our work and our governance can all be done in the metaverse, and it is a lot of fun. The COVID lockdowns accelerated our understanding of living in the metaverse, but now, I think we are all moles coming out and seeing the sun again, so there will be a lull in the gaming world while a new, more awesome platform evolves. Then we will be all in.



And, I do expect to see the Bitcoin Economy coming in the next few years: decentralized, open, transparent, perfect record keeping, taxable, with no need for accountants or IRS agents and auditors — because it is all kept on the blockchain.



Blockworks: What is the current sentiment like at Draper Associates when it comes to investing in DeFi or other decentralized applications?



Draper: We love decentralized science (DeSci), decentralized government (DeGov), decentralized real estate (DeRE) and decentralized insurance (DeIns).&nbsp;



BitcoinFi is where we are focusing most of our DeFi efforts. Other DeFi is very interesting if there are barriers to entry.



Blockworks: What advice would you give to blockchain entrepreneurs looking for investment? Draper: Make sure you are doing it for the right reasons. The money should eventually come from customers.



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Bitcoin

Q&A: Venture Capitalist Tim Draper ‘Still Loves the Decentralized World’

Jacquelyn Melinek

<div id="highlights-block_6222590637379" class="highlights">
 <ul>
 <li>The total money invested this week came from over 20 deals and funds, PitchBook data showed</li>
 <li>Prominent venture capital firm a16z invested $70 million into DeFi staking platform Lido on Thursday</li>
 </ul>
 
</div>



March started off strong as crypto companies and funds alike brought in another substantial week of capital, nearing a total of $1.34 billion. The total money invested this week came from over 20 deals and funds, PitchBook data showed.



The week’s biggest raise came from Electric Capital. The firm <a href="https://cms.blockworks.co/electric-capital-raises-1-billion-to-launch-crypto-venture-token-funds/" target="_blank" rel="noreferrer noopener">raised $1 billion</a> to launch two funds: a $400 million venture fund and a $600 million token fund. The capital raise brings the firm into the big leagues alongside major funds such as Andreessen Horowitz (a16z), Paradigm and 10T Holdings.



On Thursday, the prominent venture capital firm, a16z, invested $70 million into DeFi staking platform Lido. The decentralized platform offers Ethereum staking and other proof-of-stake assets to users through a decentralized autonomous organization (DAO) governance structure.



The fresh funds from a16z will be used to build out its staking solution and prepare for upgrades surrounding the Ethereum transition from <a href="https://cms.blockworks.co/proof-of-work-vs-proof-of-stake-whats-the-difference/" target="_blank" rel="noreferrer noopener">proof-of-work to proof-of-stake</a>, Jacob Blish, Lido’s head of business development and partnerships, said to Blockworks.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“The roadmap for 2022 is prioritizing the Ethereum network upgrade, researching and building out layer-2 solutions, and expanding to a number of new protocols,” Blish said.</blockquote>



Since 2022 started, Lido has launched liquid staking for Kusama and Polygon and plans to add Polkadot, Avalanche and Cosmos in the second half of the year, Blish noted.



In other news, a seed-stage venture capital firm, Arcanum Capital, launched its first fund of $12 million, Wednesday, to focus on blockchain technology companies in emerging markets — mainly in India.&nbsp;



“We launched the fund because we wanted a vehicle to raise significant institutional capital into, to then deploy into India and make a big impact,” James McDowall, founding partner at Arcanum Capital, said to Blockworks.



The company’s fund includes prominent investors like Polygon Co-founder Sandeep Nailwal, venture capitalist Tim Draper, and Bybit’s venture capital arm, Mirana Ventures, among others. To date, Arcanum has invested about $4 million in over 20 startups.



“We are seeing blockchain technology disrupt almost every industry,” McDowall said.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“DeFi alone has trillions of dollars of market share to go at. Add in [non-fungible tokens], gaming, and decentralized applications, and it is clear that blockchain is a gargantuan technology trend in its relative infancy.”</blockquote>



Other notable capital raises this week include:&nbsp;



<ul class="wp-block-list"><li>South African crypto exchange VALR’s <a href="https://cms.blockworks.co/in-one-of-africas-largest-crypto-raises-south-african-exchange-takes-in-50m/" target="_blank" rel="noreferrer noopener">$50 million</a> round</li><li>Thetanuts Finance closed an <a href="https://cms.blockworks.co/thetanuts-finance-get-18m-in-seed-funding-to-flest-out-defi-platform/" target="_blank" rel="noreferrer noopener">$18 million</a> round to democratize DeFi-structured products</li><li>Pantera Capital led a <a href="https://cms.blockworks.co/subspace-labs-raises-33m-led-by-pantera-capital-to-further-web3-efforts/" target="_blank" rel="noreferrer noopener">$33 million round</a> for Subspace Labs to further its Web3 efforts</li><li>Multicoin Capital and Jump Crypto co-led a <a href="https://multicoin.capital/2022/03/02/dialect-the-smart-messaging-standard/" target="_blank" rel="noreferrer noopener">$4.1 million</a> seed investment in smart messaging protocol Dialect&nbsp;</li><li>Ignite Tournaments closed a $10 million financing round to build a play-to-earn esports tournament and streaming platform</li></ul>



Check back next week for more funding news.



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10T Holdings

Funding Roundup: $1.34B Invested in Crypto Companies and Funds This Week

Michael Bodley

<div id="highlights-block_620596f2ad029" class="highlights">
 <ul>
 <li>The platform has its own native token, MPH</li>
 <li>Morpher now has more than 50,000 monthly users and has settled more than 1 million trades</li>
 </ul>
 
</div>



A blockchain-based platform for trading synthetic exposures to real-world assets has earned the backing of venture capitalist Tim Draper as the firm builds out its business.



Austria-based Morpher raised a $6 million Series A round led by Draper Associates, with participation from RTP Ventures and APEX Ventures, Morpher CEO Martin Froehler told Blockworks. The round brings the startup to a post-money valuation of $33 million.



Morpher employs the <a href="https://cms.blockworks.co/tag/ethereum/" target="_blank" rel="noreferrer noopener">Ethereum</a> blockchain to create virtual versions of stocks, commodities and currencies — without having to hold the underlying asset or transact through intermediaries. One potential application, Froehler said, would be to create an index of housing prices within a specific zip code in the US, without owning any of the property outright.



The trades are executed in the company’s virtual currency, MPH, which the company mines to turn a profit. The company operates its own non-custodial wallet. The idea is to democratize access to investments for those outside of or underserved by traditional capital markets.



“In a nutshell, it’s about access to the markets and liquidity in the markets,” Froehler said.



The platform now has more than 50,000 active monthly users from 100 countries and has executed more than 1 million trades. Froehler plans to use part of the fresh capital to hire eight new staffers on the product and marketing front, aiming to bring staff size to 20 by year-end from its current 12 employees. A mobile app is also in the works.



The plan is to also roll out investments in exotic corners of the financial markets, such as the spot price of cannabis. Morpher doesn’t charge fees on its trades but profits from its tokens.



Froehler, a former quantitative hedge fund manager, said the intent is to ease some of the pain points of traditional finance by offering 24/7, commission-less trades.



“Regardless of where you are in the food chain, trading is always burdensome,” he said. “It is costly. And it is very unfair.”



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business

Crypto Startup That Trades Virtual Versions of Real World Assets Aims to Subvert Banks

<div id="highlights-block_6203e4019ce61" class="highlights">
 <ul>
 <li>The round was led by United Kingdom-based firm Kingsway Capital</li>
 <li>“The investments are a nod from people who are sought after as great investors and looking at the future of global payments,” Josh Held, head of strategy at OpenNode, told Blockworks</li>
 </ul>
 
</div>



Bitcoin payment processor and infrastructure provider OpenNode closed an oversubscribed $20 million Series A, hitting a $220 million valuation on Wednesday, the company shared with Blockworks.



The round was led by United Kingdom-based firm Kingsway Capital with investment from Twitter, Tim Draper and Avon Ventures — a venture capital fund affiliated with the parent company of Fidelity Investments.



“The investments are a nod from people who are sought after as great investors and looking at the future of global payments,” Josh Held, head of strategy at OpenNode told Blockworks.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“For us, it emphasizes the confidence that Bitcoin is the new base layer for global payments.”</blockquote>



The funds will be used to invest further in its security, compliance, marketing and supporting its engineering teams, Held said.&nbsp;



The company, founded in 2018, is focused on building Bitcoin and Lightning Network payment infrastructure to help accelerate its growth and adoption. It provides bitcoin payment solutions like e-commerce plugins to optimize APIs for businesses and platforms like <a href="https://www.opennode.com/integrations/shopify" target="_blank" rel="noreferrer noopener">Shopify</a> and <a href="https://www.opennode.com/integrations/opencart" target="_blank" rel="noreferrer noopener">OpenCart</a>.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Digital currencies encourage more people globally to participate in the economy, and with less friction,” Ester Crawford, group product manager at Twitter, said in a statement.</blockquote>



The firm is experiencing a “significant growth period” and has noticed an increase in demand from multinational companies and platforms, Held noted. “So for us to keep up with that demand, we needed the human capital to continue educating around the space, creating use cases and ultimately create experiences for payment companies, exchanges, digital wallets and other users,” he added.



OpenNode currently provides services in over 120 countries for over 14,000 users, according to its website. Held declined to say how many users the company plans to reach in 2022.



OpenNode aims to leverage the lightning network to continue powering payment processors and plans to focus on its addition of a wallet to further support exchanges, Held shared.



“With the wallet, we’ll be bolstering our capabilities with things like account linked debit cards, adding additional local currencies and settlement options and much, much more,” Held added.



Going forward, the company also plans to expand its outreach beyond the Bitcoin and crypto ecosystem and educating others on how this market is evolving and how they can get involved, Held said. 



“We’re intending to have this platform service a range of businesses, platforms and people around the world,” Held said.



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Tim Draper

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