The age of blockchain, according to Golden Gate Ventures, is now.
So bullish, in fact, is Golden Gate on blockchain, that on Friday it announced a $10-million fund today called LuneX Ventures, targeting early-stage cryptocurrency and blockchain start-ups.
LuneX plans to invest in companies that build infrastructure and supporting blockchain services such as customer solutions, treasury management solutions and e-wallets.
It is moving quickly too. LuneX is already speaking with a number of potential portfolio companies, including two in Singapore and the US each, and one in Europe. One of them is Sparrow, a cryptocurrency options exchange based in Singapore.
LuneX’s limited partners comprise high net-worth individuals (HNIs) and family offices around the world. The fund has a five-year tenure, with a targeted final close by end-2018.
The fund claims to be one of the first of its kind to be launched. Unlike most blockchain funds in the market, LuneX is backed by a traditional venture capitalist, instead of a cryptocurrency exchange or blockchain service. The closest product in the market right now is WaveMaker Genesis, a blockchain fund launched by US-based WaveMaker Partners early this year.
Its entrance comes at a time when global regulators are displaying vastly disparate ideas on how crypto-related activities should be regulated and defined.
On Friday, the Bank of Thailand announced that Thai bank subsidiaries are allowed to issue digital tokens, while banks are still forbidden to issue, buy and sell digital tokens directly. Initial coin offerings in China continue to be banned. Japan sits on the other end of the spectrum, with the Japan Virtual Exchange Association reportedly working with the government towards a self-regulating crypto-currency exchange.
Kenrick Drijkoningen, Founding Partner of LuneX Ventures, is unfazed by the evolving regulatory regime.
“Regulation will have to come into play and that’s actually a good thing. More regulation will lead to more clarity, and eventually more institutional adoption in the space,” said Drijkoningen.
Moreover, the slump in public token prices has also presented LuneX with a timely opportunity to enter. The price of bitcoin has more than halved since its $20,000 high late last year.
Drijkoningen adds that the fund will be denominated in US dollars to allow easy access to the market.
He likens the current stage of the blockchain market to the early days of the Internet.
“Everyone was sceptical when the Internet first came about in the 90s,” said Drijkoningen. “But the value in blockchain is that for the first time ever, we can transfer assets peer-to-peer without the need for a central party, and I think there are so many potential applications that are not even considered yet.”