Canonical Crypto, a newly opened venture capital firm, has raised $20 million for its inaugural fund to back infrastructure projects for blockchain development, with a preference for talent making the transition from Web 2 to Web 3.
The fund was backed by a list of crypto heavy-hitters, including Andreessen Horowitz (a16z) partners Marc Andreessen and Chris Dixon.
Other investors included Coinbase Ventures corporate development head Shan Aggarwal, Dragonfly Capital's Haseeb Quresh, FTX Ventures partner Amy Wu and several family offices.
“The thesis is really focused on the world I grew up in, which is developer infrastructure,” Canonical Crypto founder Anand Iyer told CoinDesk in an interview. “I feel like we’re at that phase in crypto right now where we just need better infrastructure. ... We need better airports to support all of the planes that are flying.”
Iyer founded Canonical Crypto late last year after shifting from traditional tech to the crypto space. He previously spent several years at Microsoft, including a stint as the tech giant’s ambassador to the Silicon Valley developer community. Iyer then co-founded sports-centric mobile developer HItpost (acquired by Yahoo in 2013) and Trusted Child Care, which was acquired by Care.com.
Noticing a growing interest in blockchain technology among his Silicon Valley friends, Iyer said he dove in, launching his own decentralized finance (DeFi) coursework and joining Pear VC to lead crypto and blockchain investments.
Canonical Crypto was born out of a desire to support early-stage founders building blockchain infrastructure, which Iyer defines as anything that can make developers more productive from code collaboration to testing to security to storage. Amazon Web Services is the development bundle used by many in Web 2, and Iyer sees the need to unbundle similar services for Web 3.
Iyer received advice from noted venture capitalists Andreessen and Dixon while he was crafting the fund and Dixon recommended “focusing on what you can do extremely well.”
Canonical Crypto expects to invest in 40 to 50 projects with the first fund, writing checks ranging from $250,000 to $500,000 for pre-seed to seed round investments. The firm will offer operational support with a focus on helping founders figure out how to tailor their tooling for the right set of users and a go-to-market strategy to get the solution to the best audience.
The fund has already made initial investments in several companies, including Solana-based non-fungible token (NFT) marketplace Formfunction, low-code decentralized application development platform Thirdweb, communication infrastructure provider Notifi and Solana-focused data infrastructure solution Vybe Network.
Canonical Crypto is launching its first fund during a cryptocurrency bear market that hasn’t dissuaded venture capital investments. A16z broke industry records last week, announcing $4.5 billion raised for its fourth crypto fund.
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