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Venture capital firm Vessel Capital has revealed a $55 million fund aimed at investing in Web3 infrastructure and applications, as reported by TechCrunch. The founders state that their objective is not to expand but to support crypto entrepreneurs who are developing early-stage startups in launching and advancing their initiatives.
“The crypto landscape has become increasingly global, so it’s no longer the same circle and group that you might have encountered in 2018-2020, and we aim to assist a broader range of individuals,” said Mirza Uddin, one of the co-founders. In addition to his role at Vessel, Uddin serves as the head of business development at Injective Labs.
Other co-founders include Eric Chen, CEO of the Injective protocol, and Anthony Anzalone, co-founder of Burnt (previously known as Burnt Finance), a Web3 company developing XION, a layer-1 blockchain aimed at consumer adoption.
1/ I’m thrilled to announce the public launch of @VesselVC, the operator-led Web3 fund for early-stage startups.
Together with @ericinjective and Anthony, our aim was to create a new venture model that truly aligns us with the success of our founders. https://t.co/3g8RnFgyTD— Mirza (@TheMirza_) August 24, 2023
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The fund’s capital will be allocated over a five-year timeframe. Uddin believes that their background as startup founders positions Vessel to better comprehend the needs of entrepreneurs. “Often, [VCs] lack expertise in the areas they are investing in,” he remarked, adding that “the market has enough VCs, but what is genuinely lacking is real guidance and advice.” He further stated:
“Most times you’ll receive a generous check, a nice logo on your website, but beyond that, VCs don’t provide much assistance aside from occasional introductions.”
Vessel’s launch occurs during a downturn in crypto venture capital. Data from the Cointelegraph Research Venture Capital Database indicates that June experienced a 29.73% drop in investment deals, with only $779.32 million raised from 62 transactions. The venture capital firm Sequoia Capital recently reduced its cryptocurrency fund from $585 million to $200 million, citing liquidity challenges and a pivot towards smaller crypto companies.
Nonetheless, Web3 infrastructure continues to be a favored investment focus. Earlier this week, Binance’s venture capital division, Binance Labs, announced a strategic investment in Delphinus Lab’s zero-knowledge WebAssembly (zk-WASM) virtual machine, which facilitates zero-knowledge proof computation.
“Web3 infrastructure and applications will fundamentally transform the very fabric of a new Internet economy, leading to a significantly more innovative, decentralized, and capital-efficient society,” Uddin wrote on LinkedIn.
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