Multicoin Capital Plans $100 Million Raise for New Blockchain Investment Fund

This hedge fund is betting that blockchain can drive the price of middlemen down to zero, raising $100 million to invest in a range of tokens.

Oct 26, 2017 at 9:00 p.m. UTC
Updated Sep 13, 2021 at 7:05 a.m. UTC

A new investment fund called Multicoin Capital has launched with $10 million committed in a bid to invest in a range of blockchain tokens.

The firm plans to have as much as $100 million raised by the end of the first quarter of 2018, representatives said in an email. Multicoin, which revealed its initial commitments today, outlined seven different investment focuses to begin with, ranging from storing value to decentralized prediction markets.

In statements, the fund sought to differentiate itself from traditional fund efforts, stating that while it may resemble a hedge fund on the surface, Multicoin is relying on a technology-driven methodology for identifying token prospects.

Kyle Samani, managing partner, said of the effort:

"We invest in tokens, not companies, and tokens, unlike companies, require new tools to operate at scale. You can't just carbon-copy the VC model and apply it to tokens or leave $300+ million on some exchange less than a year old."

The company has been building its own security technology for the last year in order to make sure that investor funds won't be lost. Its security approach is based on three pillars: redundancy, cold storage and multi-signature. None of the private keys ever touch the internet, multiple private keys must sign a transaction to use Multicoin assets and there are copies of each private key stored in secure locations around the world.

"We like to say that the way we secure our keys is akin to the way the government secures the nuclear codes," Tushar Jain, managing partner, said of the fund's measures.

Among the firm's advisors is David Johnston, the co-founder of blockchain startup Factom. Accredited investors can participate with a minimum investment of $100,000, according to the firm. The fund charges a two percent management fee and 20 percent carried interest.

Image via Shutterstock

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