Bain Capital Launches Its First Crypto Fund Worth $560 Million

Key Insights:

• Investment giant Bain Capital Ventures is launching a $560 million first crypto-focused fund.
• BCV’s current crypto portfolio includes BlockFi and Digital Currency Group.
• The fund will invest in companies ranging from crypto start-ups to DAOs.

Major private equity investor Bain Capital is launching a $560 million fund solely focused on crypto.

First Crypto-Focused Fund

Per Bloomberg report, the venture arm Bain Capital Venture (BCV) has invested in various crypto projects, including BlockFi Inc., DeFi lender Compound, and Digital Currency Group, over several years. But the new fund would be the first to focus solely on the crypto market.

Dubbed Bain Capital Crypto, the fund aims to invest in 30 companies in the next several years, Stefan Cohen, a managing partner at Bain Capital Crypto, told the publication.

Cohen added that the fund would invest in companies ranging from crypto start-ups to decentralized autonomous organizations (DAO) in Layer 1 blockchains and storage. He said,

“They are looking for firms who are able to actively participate in governance, firms that can provide liquidity into the protocols.”

In November, the crypto fund closed and invested $100 million into a dozen undisclosed projects.

Additionally, Cohen said that the fund might invest in company equity, future tokens, or the actual coins acquired from DAOs treasuries or external markets.

VC Interest in Crypto Exploded in 2021

The fund arrives when Bitcoin is stumbling to catch up, falling 40% from its all-time high in November.

It has been difficult for crypto, with rising inflation, Russia-Ukraine tensions, and concerns over an upcoming Federal Reserve rate hike causing wild fluctuations.

Alex Evans, a managing partner at Bain Capital Crypto, told Bloomberg in an interview,

“We are unfazed and, in some ways, uninterested in short-term market gyrations. We embrace the uncertainty of this market; we are long-term believers. When the certainty is there, it might be too late for this market,” 

On the contrary, according to Pitchbook data, more than $31 billion of venture capital flowed into crypto projects last year alone, more than the ten previous years combined.

Some prominent VC crypto funds include Sequoia Capital which created a $600 million crypto-focused fund.

One of the most significant venture funds in the market Andreessen Horowitz, also known as a16z, raised $9 billion in a move to further its “involvement in both crypto and tech.”

That said, Bain may consider launching more crypto-centric funds in the future and build a platform to facilitate multiple funds over a period of time, Cohen noted.