FTX Opens $2 Billion Venture Capital Arm to Invest in Crypto Projects
FTX, the cryptocurrency exchange run by 29-year-old billionaire Sam Bankman-Fried, has announced that it will invest $2 billion in crypto projects, similar to rival exchange Coinbase and others.
FTX Ventures will invest in start-ups working in the social, gaming, fintech, software and healthcare sectors, he said. FTX, which investors valued at $25 billion in October, said the fund could also invest in tokens, tradable assets that many cryptocurrency projects distribute to users.
“Our first $2 billion fund will be flexible capital in which we can invest in stocks and/or tokens, at any size and check stage,” FTX said in a statement. blog post. “We measure time horizons in decades. We don’t mind if you are anonymous. We will not ask you to appear before an investment committee.
FTX has joined a wave of investors raising billions of dollars to invest in cryptocurrency start-ups. Katie Haun, a partner at Andreessen Horowitz, recently had talks about raising at least $900 million for two digital asset funds this month, the Financial Times reported.
Some cryptocurrency industry watchers have raised concerns about the overlapping roles played by cryptocurrency exchanges, which have come under intense scrutiny from global regulators over the past the last year.
Bankman-Fried also owns Alameda Research, a cryptocurrency trading firm that has made 95 investments since 2020, according to data from PitchBook. FTX has made 19 investments, according to PitchBook, including a stake in Sky Mavis, the development team behind the popular cryptocurrency game. Axie Infinity.
Coinbase, FTX’s main competitor in the United States, has made more than 200 investments through its venture capital arm, company executives said, making it one of the most active investors across all industries.
Bahamas-based FTX has become one of the fastest growing cryptocurrency companies since starting operations three years ago, developing a popular offshore exchange for cryptocurrency derivatives and a new market for US-based merchants.
FTX has raised at least $1.4 billion in funding over the past year, including a $1 billion round of funding it called the largest ever for a cryptocurrency exchange. Bankman-Fried said in August that the company expected to make about $400 million in profit in 2021 after bringing in about $77 million the previous year.
Amy Wu, a former partner at Lightspeed Venture Partners, has joined FTX to lead the new fund. In a statement, Wu said the company was “particularly excited about Web3 games and its ability to bring mainstream audiences into the ecosystem.”
Venture capitalists and start-up founders have recently described web3 as a new version of the internet based on cryptocurrency technology, although the term has caught the attention of some software developers.
For the latest fintech news and views from the FT’s network of correspondents around the world, sign up for our weekly newsletter #fintechFT