Paper Ventures launches $25M blockchain VC fund

Paper Ventures has launched a $25 million venture capital fund for blockchain startups.

It’s surprising to see a new player enter the blockchain venture capital arena after a few years of turmoil among blockchain and cryptocurrency startups. But there might be some logic in coming in late to fund projects now that the hype is gone from the sector.

Danish Chaudhry, Oliver Blakey and Ivailo Jordanov founded Paper Ventures and they bring extensive experience in Web3 investments and a vision to make a lasting impact on early-stage projects. There’s more info here.

The founders, with roots in Web3 investments dating back to 2010, have capped their fund at $25 million. The decision reflects their strategic focus on early-stage projects where they believe they can provide maximum value. The founding members aim not only to inject capital but also to nurture the identified projects actively.

Paper Ventures pledges to leverage its founders’ broad industry experience and networks to provide portfolio projects with resources and connections for success. The $25 million fund was raised with the participation of traditional hedge funds, family offices, exchanges, founders, and other high-net-worth crypto OGs.

Blakey, a former poker professional and cofounder of Ascensive Assets, said in a statement, “Our mission at Paper Ventures is to be at the very forefront of innovation, fostering groundbreaking ideas that redefine the boundaries of technology and finance. We believe in the transformative power of blockchain and are committed to supporting those who are as passionate about its potential as we are.”

Having navigated multiple market cycles since 2010, the founders have been early backers of now-dominant projects like Frax Finance, SEI, Polygon, Injective, Polkadot, Moonbeam, and Cosmos. Their portfolio also extends to gameFi projects such as Merit Circle/Beam, Illuvium and YGG.

Chaudhry, with a background in traditional finance, said in a statement, “With Paper Ventures, I’m excited to invest in groundbreaking ideas and also to use my experience to elevate the brilliant minds behind them, fostering a collaborative ecosystem that propels innovation to unprecedented heights.”

At Blackrock, Chaudhry was on the UK European equities team for a number of years (at that time managing close to $500 billion in assets), where he also helped build many of the risk models used within their proprietary platform called Aladdin. After a couple of exits under his belt (startups he founded), he went on to found and launch the Bitcoin.com Exchange in 2018/19, which subsequently was rebranded to fmfw.io, growing it from zero to 1.5 million users in a short period of time.

Jordanov, an entrepreneur and founding member of Altitude.fi and Deadalus Collective, rounds out the trio of founders. The Paper Ventures team collectively shares a commitment to empower visionary entrepreneurs, catalyze disruptive technologies, and contribute to the next wave of impactful change.

Jordanov is a decentralized finance native at heart. Previously, he was a partner at 7percent Ventures, a London fund with a focus on deep tech. He is also on the founding team of the DeFi protocol Altitude.fi and one of the founders of the Deadalus Collective, a blockchain native collective that has backed and supported many of the protocols in the market today.

In an email to TechForgePulse, the partners said they are investing in games and have done a deal which hasn’t been announced yet. But that is not their sole focus.

They said they are looking at all sectors because they want to catch preseed opportunities everywhere and not be pigeonholed. As for the timing, they said, “We are still at the early stages of the industry, which presents large, asymmetric opportunities and as experienced investors and contributors to the space we are well positioned to capture them and generate strong returns while helping to propel the industry forward.”

I asked if the sector had been over-invested in. They replied there aren’t a lot of seed stage funds right now that are founder first.

“Most funds are too large, having to write large checks which are not always advantageous to founders just setting out, or are more focused to realizing the return on their investments from years ago,” they said. “So we are filling a gap where pre seed seed stage funding needs to be less about writing a check to follow on to please LP’s and make fees but more about helping founders build a business from the outset”.

They added, “And, yes, it may seem that seed preseed has been over invested for the past few years; however most funds that went that route are now just looking to harvest. Leaving, as above, an obvious gap in the funding landscape.”

The three founders have operated in this space since as early as 2010, having been through multiple cycles. Now they are combining their efforts. They have worked with and funded at seed/early stage some of the most prominent projects. To name a few, their investments include Frax Finance, SEI, YGG, Polygon / Matic, Injective, Polkadot, Cosmos, Merit Circle/Beam, Illuvium, Wintermute, Gensyn and Morpho.