Bear markets turn out to be great vintage years for crypto VCs, say CMCC Global execs

Bear markets turn out to be great vintage years for crypto VCs, say CMCC Global execs

(from left to right) Martin Baumann, co-founder; Charlie Morris, co-founder; Yen Shiau Sin, managing partner of CMCC Global.

Even as crypto venture capital (VC) firms worldwide are staring at one of the chilliest fundraising times, Hong Kong-based CMCC Global has launched its $100 million fund.

“The [fundraising] conversation started around June or July last year. It was a hard process to raise that capital—we pitched to over 200 investors over the last 12 months,” Martin Baumann, co-founder at crypto VC firm CMCC Global, told DealStreetAsia in an interview.

“If you break this down per working day, we had an investor pitch almost every working day. And oftentimes several pitches. We travelled to 12 countries to get this to work,” he added.

The new Titan Fund, which already hit its target corpus in the first close earlier this month, adopts a traditional VC investment strategy and parks capital in early-stage startups across infrastructure, fintech, and consumer applications. Yen Shiau Sin, who previously worked as director of strategic investments at B1, will serve as the co-founder and managing partner of Titan Fund.

So far, the firm has made five investments, with two of the investee startups headquartered in Hong Kong—Mocaverse, the membership NFT collection platform for Animoca Brands’ network of investees, shareholders, and partners; and user data infrastructure platform Terminal 3.

Baumann, who previously served as CFO at global fintech investment firm Nova Founders Capital, co-founded CMCC Global in 2016 with Charlie Morris, who previously had a stint as a software engineer at venture capital firm Mind Fund Group. The firm claims to be the first venture capitalist in Asia that focuses solely on blockchain and Web3 investments, with over $500 million in assets under management (AUM).

Apart from its Titan Fund, the firm, with offices in Berlin and Toronto, besides its headquarters Hong kong, also makes direct investments into the native assets underpinning blockchain protocols via its Digital Asset Funds. Meanwhile, Crest and SYZCrest are its other two quantitative trading hedge funds.

Even though CMCC Global launched a venture-style fund only now, the seeds of the investment vehicle were sown way back in 2018. “But then we did our homework and realised that to do that the proper way, we would need to have licences from the SFC in Hong Kong. We got the licences last summer,” said Baumann.

He believes that bear markets tend to shape up to be great vintage years with attractive upside. “We raised the Digital Asset Fund 1 in the summer of 2016 amid a bearish market environment. The Digital Asset Fund 1 had 136% net internal rate of return (net IRR) over five years,” he explained.

“We all think that you can be a good investor in the bear market, and you can be a good investor in a bull market. But the result of both is very different,” he emphasised.

Edited excerpts of an interview with Baumann, Charlie Morris, and Yen Shiau Sin at CMCC Global:

Bring stories like this into your inbox every day.

Sign up for our newsletter - The Daily Brief
Subscribe to Newsletter