Private equity firm 10T seeks $200 million for new crypto startup investment fund

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Crypto-focused investment firm 10T Holdings is launching a new digital asset seed investment fund seeking to raise $200 million from investors.

The new venture, dubbed TenSquared Capital, or 10SQ, aims to support digital asset startups at various stages of growth, Bloomberg reported, citing people familiar with the matter.

The company already has two planned investments, including one in a crypto wallet infrastructure startup that is expected to close in the coming months.

The 10SQ fund will be led by Stan Miroshnik, co-founder and partner of 10T, who will join the company as CEO and managing partner. Elaine Co, founding strategic advisor at StillBrook Capital, will also join the platform as a general partner.

10T Holdings has $1.2 billion in assets under management and has invested in companies like digital exchange Kraken and crypto wallet maker Ledger, both of which have raised funds at valuations of over $1 billion. of dollars.

TenSquared Capital will seek to follow in the footsteps of other venture capital firms, such as Sequoia Capital and Andreessen Horowitz, by becoming a registered investment adviser.

The new fund has already secured commitments from 10T sponsors for its upcoming investments, according to people familiar with the matter.

This fundraising effort comes at a time when cryptocurrency investment has slowed amid recent scandals and setbacks that have rocked the industry.

VCs invested 80% less in crypto startups in Q1 2023 compared to the previous year.

Nonetheless, TenSquared Capital is committed to backing startups that demonstrate viability and innovation.

The company also plans to focus on equity investments rather than tokenized investments, reflecting greater investor caution towards the use of crypto tokens which have been highly volatile and subject to regulatory scrutiny. .

VC funding now goes to AI startups

During a recent interview, Mysten Labs founder Evan Cheng claimed that the recent increase in AI funding has hampered funding for the crypto industry.

Cheng explained that AI startups are now getting a significant chunk of venture capital money that used to go to crypto.

He added that early-stage crypto companies can still get funding, although their valuations have taken a hit due to the recent crypto downturn.

However, late-stage funding has become increasingly difficult for startups, with only the most successful companies eligible for support.

“But once you get to the end of the Series A and Series B stages, growth capital is hard to come by. It has to be an exceptional startup to get funded, unless you’re in the excitement bubble around generative AI right now, it’s going to be a lot harder for a startup to raise funds.

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