Lemniscap Raises $70M Fund for Early-Stage Web3 Startups

Venture capital firm Lemniscap has successfully raised $70 million for a new fund aimed at supporting early-stage Web3 startups. This fund will focus on blockchain-based solutions, including zero-knowledge infrastructure and emerging Bitcoin ecosystems.

Fund Details

• The new fund will invest in various blockchain businesses, covering areas such as:

  • Zero-knowledge infrastructure
  • Consumer applications
  • Emerging Bitcoin ecosystems
  • Security
  • Decentralized physical infrastructure (DePIN)

• Accolade Partners, a fund of funds that also invests in early-stage blockchain ventures, is backing this new fund.

Lemniscap's Investment Strategy

• Lemniscap specializes in early-stage investments in the crypto sector.

• The firm launched its first fund in 2017, just prior to the 2018 crypto market crash.

• To date, it has made over 130 investments in the Web3 space, backing notable protocols such as:

  • Avalanche
  • Fairblock
  • Celestia
  • EigenLayer
  • Euler
  • ParaSwap
  • Axelar

• The firm's investment thesis emphasizes long-term success over short-term gains, focusing on innovative blockchain products and services.

• Portfolio startups receive both financial support and strategic guidance.

Market Resurgence

• The Web3 startup ecosystem has shown signs of recovery in 2024 after a downturn in the previous year characterized by:

  • Bankruptcy cases
  • Regulatory uncertainty
  • Declining crypto token prices

• According to Pitchbook, crypto startups raised $2.7 billion in the second quarter of this year, with infrastructure projects like Monad and BeraChain leading the way.

• Despite a 12.5% decline in the number of deals, the total capital raised indicates that investors are becoming more selective but are willing to commit larger amounts to promising projects.

Future Projections

• In 2023, crypto firms secured a total of $10.1 billion in investments.
• Pitchbook anticipates that startup funding will exceed this amount in 2024, potentially reaching $10.8 billion by the end of the year.