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Banking on the Asian market to provide stellar investment returns for clients, U.S.-based Dragonfly Capital Partners raised $100 million from a diverse set of investors to invest in the regional cryptocurrency and blockchain market, reported Forbes on October 9, 2018.
Dragonfly’s Crypto Push
Dragonfly is led by crypto-investor Alexander Pack and venture capitalist Bo Feng. The former made his name leading numerous fundings rounds in crypto-startups across the world, while the latter is an industry veteran with 20 years of experience under his belt and an investment portfolio scaling billions of dollars.
The venture aims to invest in cryptocurrency-focussed platforms, dApps, protocols, and startups paving the way forward for a “crypto-driven” economy. The firm has also zeroed down on Asia as a ripe market for crypto-investing, primarily due to emerging nations that could drive newer forms of trustless finance.
Pack notes Dragonfly is an “unstructured” fund, meaning there are no directives or guidelines to restrict their money into a particular type od crypto-business – an infamous feature of the VC market that limits most larger funds. He also added that Dragonfly was created as it “made more sense” to approach crypto’s nascent market with a new entity, instead of a traditional player tapping a new market.
Despite its infancy, the fund has already invested $20 million in more than 20 crypto startups and hedge funds, including stablecoin startup Basis, web-scale smart contract provider Spacemesh, investment firm MetaStable Capital, and blockchain collaborative tool Oasis Labs.
Bridging the Gap
Sharing his thoughts, MetaStable partner Haseeb Qureshi feels the cryptocurrency sector can feel like “two separate ecosystems,” despite the asset’s global and 24/7 markets. But, a firm like Dragonfly “can toe the line between the two hemispheres” and gain a powerful advantage by identifying future trends and predicting the movement of the cryptocurrency market.
While working in Hong Kong in 2014, Pack realized there was a huge market opportunity for cryptocurrencies in the region, but an acute absence of related startups. At the time, he worked for Arbor Ventures and moved on to San Franciso where he led investments in Polychain Capital and AI-powered trading predictor Numerai. Pack then joined Bain Capital’s crypto division and led funding for 16 crypto funds and 11 startups.
During his time in San Francisco, Pack met Feng as the latter was investing in Basis and crypto-exchange OKEx, now the third-largest in the world by daily traded volume.
Now, the duo faces the task of carving out a niche in a market that’s highly competitive, fast-growing, yet relatively low on the number of businesses seeking investments. So far, their credibility has helped to raise funds from a 16z crypto, Binance Labs, OKEx Ventures, Baidu Ventures, and a host of other traditional investors.
With the reputation, Dragonfly can lead investments in a competitive VC space where crypto funds battle in one round and join forces in the next. Additionally, Pack notes the hype—and deflation of hype— for ICOs and Bitcoin in the general public has not stifled the quality of projects or investments.
“We try to take a very long-term perspective. Crypto has the power to transform things at a deeper layer. Not just money—transforming what we think of as property,” concludes Pack.