While investors continue to question whether crypto will swallow up more traditional VC opportunities down the road, it certainly appears that today the blockchain space is eating up the attention of Silicon Valley’s buzziest early investors.
Jesse Walden tells TechCrunch his crypto-centric VC firm Variant has raised a new $110 million early-stage fund, just over a year after the firm launched with a $22.5 million debut fund. Notably, Walden raised this fund alongside investor Li Jin, who tells TechCrunch that she has joined Variant as its third general partner, merging her firm Atelier Ventures with Variant after deploying the entirety of her own creator economy-centric debut fund.
Jin and Walden overlapped during their time at Andreessen Horowitz, and, despite considerably different founding theses for their solo GP firms, found plenty of shared interest as they deployed their respective funds during the pandemic.
“We realized that there was quite a bit of overlap and convergence in the themes that we were investing against — we, the passion economy, and Jesse, the ownership economy,” Jin told TechCrunch in an interview. “We co-led several deals together, we co-invested in several deals together, and it just became quite clear that the two theses were two sides of the same coin.”
Jin has cultivated an outsized presence in the tech investor community in the past couple of years, building up her reputation for spotting trends in the creator economy space. She spent nearly four years at Andreessen Horowitz helping the venture giant source deals, before leaving last summer to start Atelier Ventures. Jin officially launched the $13 million fund this past February, though she had been writing checks throughout much of 2020. Throughout 2021, Jin has grown more outspoken in her views that technologies born out of the blockchain, like NFTs, may be the key to the next generation of creator monetization tools.
“I raised my fund really as a traditional consumer Web2 fund,” Jin told us. “As I started deploying and spending more time in the ecosystem, I realized that crypto actually offered this really powerful toolset for aligning incentives between platforms and their participants.”
An upswing in cryptocurrency prices during the pandemic, teamed with surging interest in institutional NFT art sales and crypto gaming titles like NBA Top Shot and Axie Infinity, made 2021 a massive year for crypto investment among the venture community. Andreessen Horowitz made waves earlier this year with the announcement of their largest vertical-specific fund yet, a $2.2 billion crypto fund. That growing stockpile of crypto-destined capital has made a16z impossible to ignore among smaller crypto funds looking to back the hottest companies.
Atelier has had significant crossover with investments led by a16z, particularly on the crypto side of things. In addition to backing more traditional creator platform plays like Substack, Atelier’s portfolio of investments also includes NFT startup Yield Guild Games, DAO platform Syndicate, protocol XMTP and crypto publishing platform Mirror. Variant has participated alongside both Atelier and Andreessen in a handful of deals, but has also backed competitors as the firm has dug deeper into the emerging worlds of NFTs, DeFi and DAOs. Variant’s portfolio includes decentralized crypto exchange Uniswap, NFT platform Foundation and crypto wallet Phantom.
Earlier this year, Variant brought on its second GP, Spencer Noon, who joined from a Miami-based crypto fund. Walden notes that many of the founders in the firm’s portfolio are also backers of the new Fund II itself — an effort Variant has made to leverage its network to stay competitive with bigger funds.
“As the space continues to expand, we obviously can’t hire 100 people in-house,” Walden tells TechCrunch. “And so we decided we need to take a network-driven approach, and in order to build a network that grows bigger, faster and adds more value to all stakeholders, we just looked to our thesis, which says that the way to grow bigger, faster is to give ownership to your users. So, who are our users? They’re the founders that we back and other builders in the space, and we have over 100 of them in the fund, meaning they own the fund itself.”