Bain Capital Launches $560M Crypto Fund

The $155 billion investment giant will focus on DeFi and Web 3 and isn't afraid to get its hands dirty with liquid tokens.

AccessTimeIconMar 8, 2022 at 1:00 p.m. UTC
Updated Mar 8, 2022 at 1:38 p.m. UTC

Brandy covers crypto-related venture capital deals for CoinDesk.

Bain Capital, the investment firm with around $155 billion in assets under management, announced a $560 million fund focused exclusively on the crypto ecosystem.

Bain Capital Crypto is “oriented around early-stage investing all the way through liquid tokens,” Bain Capital Ventures (BCV) partner Stefan Cohen told CoinDesk in an interview.

It’s the latest traditional finance firm to go whole-hog into the nearly $2 trillion cryptocurrency sector, following Sequoia and others that have made their intentions clear in recent months.

So far, the Bain fund has deployed just under $100 million in capital across about a dozen portfolio companies. The investments were largely in early-stage, pre-launch protocol projects, said Cohen.

“We’re at the very early innings of a multi-decade technology shift by which the internet is going to be re-architected on open, community-owned public standards,” Cohen told CoinDesk. “In order to properly invest against that macro trend, we really need a dedicated investment platform that’s designed around the needs of the founders and the ecosystem.”

Investment areas

Cohen and BCV partner Alex Evans are co-leading the fund, which now has seven members split nearly evenly between researchers and investors.

Bain Capital Crypto is broadly interested in the decentralized finance (DeFi) and Web 3 categories, but the fund has a narrower focus on protocols and the native tokens that power them.

“The number one priority is investing in the infrastructure,” said Cohen. “That would be layer 1 scaling solutions, privacy products, middleware, storage solutions and the sort of components used to build the ultimate internet services we think we’ll be interacting with in the future.”

Governance goals

Crypto requires a new kind of investment team that also has the capability to actively participate in protocol governance, said Evans.

“You should look for us to build our resume on-chain. We want to use and participate in the protocols and companies we are involved in,” said Evans.

Bain isn’t new to crypto investing, having previously backed investment rounds for DeFi protocol Compound Finance, CoinDesk parent company Digital Currency Group and bitcoin (BTC) rewards platform Lolli. Bain Capital Ventures co-led BlockFi’s $350 million funding round last year.

A crypto-specific Bain fund was hinted at in a regulatory filing last September. The filing was for “BCV Crypto Fund I: and had made no sales at that time.

Bain Capital Crypto is the latest sign that institutional investors are taking a more hands-on approach with crypto opportunities. Last month, venerable venture capital firm Sequoia Capital said it would raise up to $600 million for its first crypto-specific fund.

CORRECTION (March 8, 13:38 UTC): Changes figure in headline and first paragraph. The fund is worth $560 million, not $530 million as was originally reported.

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Brandy covers crypto-related venture capital deals for CoinDesk.

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Brandy covers crypto-related venture capital deals for CoinDesk.

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