A venture fund based in Luxembourg, Fabric Ventures, aims to back the founders of the Open Economy across the world. Now, it has launched a $130 million fund that comprises $30 million funding from the European Investment Fund (EIF).
Other notable limited partners in the new fund include Niklas Zennstrom’s venture firm Atomico, Mike Novogratz’s Galaxy Digital, Barry Silbert’s DCG, German multi-family office Lennertz & Co., Blockchain Coinvestors and Hutt Capital.
Also investing are 42 partners, executives, contributors and founders drawn from Ethereum, (Transfer)Wise, PayU, Polkadot, Sorare, Ledger, Ebury, PPRO, Aztec Protocol, Raisin, Aragon, Orchid, MySQL, MariaDB, NEAR Protocol, Curve, Blackpool, StakeDAO, Stake Capital, PayPal, Google, The New Institute, Verifone, Earlybird, Accelerator Ventures, Felix Capital, LocalGlobe, Matrix Partners China, Cambridge Associates, Evanston Capital, Brunswick, OpenOcean, DN Capital and Claret Capital. Fabric Ventures views an open, broad and active community as central to attracting the finest founders and propelling them on their path.
Notably, Fabric Ventures 2021 Fund is the first EIF-backed fund mandated to invest in digital assets. It will back traditional equity as well as the software tokens and other digital assets native to these new, inclusive and collaborative networks and applications. These are all underpinned by the recent invention of digital scarcity and hence ownership. The founders of the open economy frequently have the explicit objective of delivering solutions to many of humanity’s most fundamental challenges. Fabric Ventures Group is registered as an AIFM with the CSSF in Luxembourg and includes an advisor entity which has been made an appointed representative in the UK. Fabric Ventures LLP is an appointed representative of G10 Capital Limited, which is authorised and regulated by the Financial Conduct Authority
Need for Open Economy
The current digital platforms that our lives depend on are closed economies. These centralise data and power in the pursuit of profitability. Over time, these platforms cease to innovate for their users and protect their privacy. In contrast the new technologies support the open flow of users, data, and value, facilitating an open economy with equitable incentives and economic returns for all participants, leading to a fairer society.
In just ten years, the network capitalization of Bitcoin and Ethereum has attained one trillion dollars, fueled by corporate adoption from the likes of Tesla, Goldman Sachs, Coca-Cola and PayPal. In just two years, a $100 billion decentralised finance sector has emerged. In just two months, the $1.5 billion market in user-owned media and crypto collectibles has shaken up the media and art worlds — including Fabric Ventures’ portfolio company Axie Infinity’s incredible rise.
Axie Infinity, an NFT based breeding and battling game, has become the dApp or blockchain with the most cumulative revenue over the last 7 days** (after Ethereum). Their pioneering ‘Play-to-Earn’ model means that if ranked against national averages, Axie Infinity would have the 25th highest monthly salary of all countries in the world. Individuals in the Philippines are now in a position to quit their day job and earn up to four times the local minimum wage by just playing the game for a few hours each day.
“Fabric’s new fund will be put to work partnering with the most daring and relentless entrepreneurs of the open economy on their journey to architect lasting protocols and platforms, not simply companies,” said Richard Muirhead, Co-Founder and Managing Partner at Fabric Ventures. “It is now well acknowledged that there is a need for a web that is user-owned and, consequently, more human-centric. There are astonishing people crafting this digital fabric for the benefit of all. We are excited to support those people with our latest fund.”
Commenting on the funding round, EIF Chief Executive Alain Godard said: “We are very pleased to be partnering with Fabric Ventures to bring to the European market this fund specialising in blockchain technologies. Despite their rich engineering talent, deeptech entrepreneurs in the blockchain sector in Europe often struggle to find financial support and investors that have a deep understanding of their space. This partnership seeks to address that need and unlock financing opportunities for entrepreneurs active in the field of blockchain technologies – a field of particular strategic importance for the EU and our competitiveness on the global stage.”
Thierry Breton, European Commissioner for Internal Market, said: “As we see an ever-growing need for investments in Europe for the increasing number of highly innovative start-ups and SMEs in the Blockchain and AI space, I welcome this step in our collaboration with the EIF on this investment fund. We will continue to support the incubation and scale-up of highly innovative AI and Blockchain technologies, which are critical in ensuring that Europe is home to the thriving digital innovators of the future.”
In backing this latest fund, Gav Wood, founder of Polkadot and former CTO of Ethereum comments: “Fabric supported an early Ethereum meetup I led in January 2014 and followed my team as we spun out Parity in 2016. So we were very happy to have them as a backer in 2017 when we launched Polkadot. They have supported the Web3 Foundation ecosystem throughout and ongoing.”
Commenting further, Richard Muirhead says: “Humankind’s greatest challenges and exciting opportunities require broad stakeholder collaboration. The new software of the open web makes it easier than ever to kickstart these new digital ecosystems and ensure that concentration of market power never leads to their corruption and demise. Opportunities stretch from accounting for environmental impact and driving financial inclusion of individuals and businesses to harnessing the untapped power of health data. As these new equitable and inclusive digital networks become pervasive and interconnected, Fabric Ventures believes we shall see the global rise of a fairer and more open economy and a fairer society.”
Fabric Ventures: A heads up
Founded in 2012 by Anastasia Belyaeva, Max Mersch, and Richard Muirhead, Fabric Ventures, initially known as Firestartr, focuses on being the “first institutional check” invested in companies, crypto assets and digital networks on a path to be global winners, identified primarily through its peerless pan-european footprint.
Further, the VC’s current portfolio includes Polkadot, NEAR Protocol, Sorare, Decentraland, Orchid, 1inch, Coinbase, and The Graph. Historically the team also invested in Tagomi, Bitstamp, Bitcoin, Ethereum, Maker, Supermetrics, Thimble, Bitrise, Railsbank, Wagestream, Citymapper, Tray.io, Pusher, Modulr, Codat, Shazam, Raisin, PPRO, Tink, (Transfer)Wise, iZettle, and more.