ccording to an announcement made today, the London-based venture capital firm Northzone has launched a €1 billion fund with the goal of investing in crypto and fintech startups.
The company, which was founded in 1996 as a generalist investor, has backed a diverse range of technology companies, from open banking specialist TrueLayer and buy now pay later behemoth Klarna to music streaming platform Spotify, which is believed to be discovering web3.
However, crypto technology startup Magic Labs, web3 privacy firm Sunscreen, and DeFi protocol Gro are among its portfolio companies.
Northzone partner Wendy Xiao Schadeck characterized it as a "core sector" for the firm. She wrote the crypto investment thesis in July 2018, at the beginning of the long crypto winter.
"Web3 and web2 two will most likely start to converge during the lifetime of this fund cycle. For example, some of our last fund's web2 fintech companies have launched tokens, and some of our gaming companies have decided to support their follow-on rounds from web3 VCs. So it's tough to say where the delineation will be."
According to Xiao Schadeck, the venture capital company has the infrastructure to support startups through investments and token revenues and has previously engaged in staking tokens. She also stated that, under the right conditions, the company would be willing to invest in a decentralized autonomous organization.
The firm currently has no exposure to NFTs, unlike Blossom Capital, a London-based venture firm that has purchased NFTs — along with a Bored Ape, a CryptoPunk, and an Azuki, according to pioneering partner Ophelia Brown — through its own latest $432 million fund. However, this could change.
Xiao Shadeck also stated that she is not put off by some of the roadblocks that DeFi has experienced. Gro was impacted by Terra's UST depegging in May, prompting it to rethink its customer yield generation strategy. Xiao Shadeck, on the other hand, stated that it would continue to investigate web3 infrastructure and DeFi protocols such as Gro.
According to Xiao Shadeck, the jury is yet to determine whether Northzone will follow in the footsteps of other European venture capitalists like Aglaé Ventures and Cherry Ventures by introducing a dedicated crypto fund.
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