This deep into the crypto winter, debuts by major venture funds are few, a far cry from previous years. However, the freeze is not stopping some venture capitalists from launching new funds targeting the decentralized tech market.
Dispersion Capital has raised an initial $40 million fund to invest in decentralized infrastructure, the company exclusively told TechCrunch. The venture vehicle is backed by Web 2.0 and Web3 companies including WeNade, Circle Ventures, Ripple, Alchemy Ventures, NGC and individual general partners. The company will focus on raising capital in pre-seed and seed rounds and has already committed 10% of the fund.
The development of blockchain infrastructure technology has been slow, said Patrick Chang, founder and managing partner of Dispersion Capital. “We believe there is much more to be built.”
Blockchains and decentralized computing are still very new, Chang added, arguing that they are still “missing a lot of pieces.” In his view, the existing blockchain infrastructure technology has been built up gradually, and new development works that bring Web2.0 “know-how” to Web3 could help harmonize it.
During the 2021 crypto bull market, many startups were formed to develop NFT projects, decentralized finance protocols and more, but few of the emerging tech companies focused on the underlying infrastructure itself, Chang said. “What was frustrating for users and people coming to web3 was onboarding, scalability and hacks. The infrastructure was incredibly immature and people didn’t think about it.”
Fast forward today, there are a multitude of startups and developers working to improve the Web3 infrastructure.
Dispersion plans to deploy its fund in startups looking to onboard new crypto users with technologies such as updated data infrastructure, cybersecurity, and smart contracts.
While primarily focusing on U.S.-based companies, Dispersion is also actively investing in other regions, Chang said. About a quarter of its active investments are based in Israel, but the company is also looking at construction companies based in Asia as the region sees more ZK, or zero-knowledge, technology development, Chang noted.
“Our mission is how can we bring Web3 to a level similar to cloud computing, so it’s an invisible technology that not everyone realizes is using,” Chang said. “The long-term focus is how we bring Web3 to the masses and spread it [to] a billion users.”