Paper Ventures $25M blockchain VC fund targets early-stage startups

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Venture capital firm Paper Ventures has launched a new fund to support blockchain-based startups in their early growth stages.

The new VC fund, capped at $25 million, will focus on capital injection into firms building play-to-earn (P2E) games, non-fungible tokens (NFTs), and decentralized finance (DeFi). Rather than merely injecting funds, Paper Ventures says it will provide technical and commercial direction for select projects to help them achieve success.

The fund’s strategic focus on early-stage startups flows from the desire to provide “maximum value,” setting funded projects on the right path. Paper Ventures disclosed that contrary to popular opinion, pre-seed stage funding is not oversaturated at the moment, and the fund is intended to fill specific gaps in the space in a founder-focussed manner.

“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,” said Oliver Blakey, co-founder at Paper Ventures. “We believe in the transformative power of blockchain and are committed to supporting those who are as passionate about its potential as we are.”

Paper Ventures points to its founders’ considerable wealth of experience as a reason for the fund’s future success. Danish Chaudhry, one of the co-founders, cut his teeth in traditional finance with BlackRock as part of the U.K. European equities team with $500 billion in assets under management.

“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,” said Chaudhry.

Other members have garnered years of experience in DeFi since 2015, underscored by investments in Frax Finance, Polygon, Polkadot, and Wintermute, among others.

Despite its focus on nurturing projects, Paper Ventures says it will deliver healthy returns to backers comprising traditional hedge funds and leading digital asset exchanges.

Perfect time to launch a Web3 fund

A cross-section of industry stakeholders have questioned Paper Ventures’ decision to launch a Web3 fund in 2024, given the sector’s track record of implosions and other black swan events.

However, enthusiasts argue that with most of the hype out of the sector, 2024 may be the ideal time to launch a fund.

Web3 funding has taken a massive hit in recent months, with analysts recording a flight of capital to artificial intelligence (AI) projects. Despite the decline, funding for metaverse-based startups has remained above water, anchored by rising real-world use cases for the offering.

While there may be setbacks, the global startup community is gradually becoming a significant interest for many VCs and investors, but few get adequate support to flourish in the highly competitive tech industry.

Block Dojo is among a handful of incubator programs designed to aid startups, from developing solutions to incorporating the right business model and garnering support and funding from potential investors.

Started in the United Kingdom, Block Dojo has incubated 41 companies since operations began in January 2022, with 90% of them still operational. Following this success and driven by its ambition to support more startups globally, Block Dojo brought the initiative to the Philippines with support from nChain.

Block Dojo Philippines was launched in August 2023 and began mentoring its first batch of cohorts on January 8, 2024. The 12-week program is intended not only to support startups in building their businesses but also to future-proof them, helping them adopt and utilize blockchain technology to their advantage.

Watch: Block Dojo Philippines bets big on blockchain tech startups