Bain Capital Ventures Launches $560 Million Crypto Fund

(Bloomberg) --

Bain Capital Ventures -- one of the world’s biggest startup-investment firms -- is launching a $560 million fund focused exclusively on crypto-related efforts.

The fund closed in December, and the firm has already invested $100 million into a dozen efforts, which it doesn’t yet disclose, said Stefan Cohen, a managing partner at Bain Capital Crypto, which is running the fund.

Bain Capital Ventures has been investing in crypto for the last seven years, pouring money into crypto lender BlockFi Inc., decentralized-finance lender Compound and Digital Currency Group, which runs a slew of crypto-related businesses. But its new BCV Fund I is the first fund focused just on this market.

“We have high conviction we are at the beginning of a multi-decade technology shift,” Cohen said in an interview. “We really needed a dedicated team and a dedicated fund structure. That’s really what lead to the addition of Bain Capital Crypto.”

The fund is launching at a difficult time for crypto, with Bitcoin down about 40% from its all-time high in early November amid worries over the Federal Reserve’s policies to combat rising inflation and geo-political tensions.

“We are fundamentally a long-term oriented, 10-year fund. We are taking a very long view,” Alex Evans, a managing partner at Bain Capital Crypto, said in an interview. “We are unfazed and in some ways uninterested in short-term market gyrations. We embrace the uncertainty of this market, we are long-term believers. When the certainty is there, it might be too late for this market.”

Bain is looking to use the fund to invest into everything from crypto startups to decentralized autonomous organizations (DAOs) in areas such as Layer 1 blockchains -- ones that compete with the likes of Ethereum -- and storage. It expects to deploy the fund in the next two to three years, and invest in perhaps 30 companies, Cohen said. And it’s planning to be a much more active investor than is typical -- as many crypto startups demand.

“They are looking for firms who are able to actively participate in governance, firms that can provide liquidity into the protocols,” Cohen said. The fund’s team of seven includes scientists and engineers.

The fund may invest in company equity, promises of future tokens or the actual coins, which it might acquire from DAOs’ treasuries or on secondary markets, Cohen said.

Once this fund’s capital is deployed, Bain may consider launching more crypto-focused funds, Cohan said.

“Our view is that this is a 10-20-year opportunity, and we are building a platform here that we think can facilitate multiple funds over a period of time,” Cohen said.

Bitcoin rose about 2% to $38,565 in New York trading Tuesday. The largest cryptocurrency by market value has dropped around 17% this year. 

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