Top DeFi VCs: Surveying Some of the Space's Biggest Investors

William M. Peaster on 17 Jun 2020

As Ethereum’s DeFi ecosystem continues to heat up, the specter of DeFi VCs — and their potential profits — also grows. Here’s a non-exhaustive list of some of the companies who have made big splashes in the young but maturing DeFi arena to date.

1kx

A self-described token network fund, 1kx is a VC firm run by Lasse Clausen and Christopher Heymann that’s betting on cryptoeconomic incentives being embedded into all things mainstream. 1kx aims to be the “most founder friendly and helpful source of early stage capital for tokenized projects.”

Notable investments: Arweave, Matter Labs, Nexus Mutual, Flexa

a16z

Andreesen Horowitz, or a16z, is a powerhouse VC firm that’s become well acquainted with the DeFi space in recent years. Across two crypto-centric funds, a16z has nearly $1 billion under management.

Notable investments: Arweave, Augur (REP), Coinbase, dYdX, Keep Network, Libra, Maker (MKR)

Coinbase Ventures

Coinbase Ventures is the venture arm of U.S. cryptocurrency exchange giant Coinbase. The firm aims its investments at “companies building the open financial system.”

Notable investments: Arweave, Aztec, Compound, Dharma, Etherscan, Graph Protocol, InsaDApp, OpenSea, Staked, StarkWare, UMA

ConsenSys

ConsenSys is an Ethereum development studio that backs some of the most respected Ethereum infrastructure services around. The company manages its investments through ConsenSys Labs, which also runs the Tachyon accelerator for young blockchain startups.

Notable investments: 3Box, Atomic Loans, Gitcoin, Gnosis, Grid+, Infura, MetaMask, OpenLaw, RocketPool, Ujo, Unlock

Dragonfly Capital

Dragonfly Capital, which maintains offices in Beijing and San Francisco, is a venture capital firm that’s a force to be reckoned with in the Asia market. The company turned heads in 2019 when it helped buy up $27.5 million worth of MKR tokens.

Notable investments: Compound, Cosmos, dYdX, Maker, Nuo.Network, Paradigm Labs, UMA

DTC Capital

DTC Capital is a “crypto-native investment fund” managed by Spencer Noon, the creator of the new crypto analytics publication Our Network.

Notable investments: Graph Protocol, InstaDApp, Keep Network, PoolTogether, Skale Network

Framework Ventures

Framework Ventures is a VC firm that doubles as a research and development company. Its principal investment focuses are Web 3.0 and DeFi projects.

Notable investments: Chainlink, Common Labs, Futureswap, Synthetix

IDEO CoLab Ventures VC

IDEO CoLab Ventures, also known as IDEOVC, invests in “early-stage distributed web startups.” When it comes to projects it supports, the firm positions itself a design partner.

Notable investments: InstaDApp, OpenZeppelin, Optimism, PoolTogether

Pantera Capital

Pantera Capital is an investment firm and hedge fund centered around blockchain and cryptocurrency ventures. Founded in 2013, the company describes itself as the “first U.S. Bitcoin investment firm.”

Notable investments: 0x Protocol, Ampleforth, Audius, Brave, Circle, InsaDApp, Kyber Network, Livepeer OmiseGo, Paradex, Staked, Zcash

Paradigm

San Francisco-based Paradigm is a crypto-centric investment firm founded by Fred Ehrsam and Matt Huang. The company invests in early and late-stage opportunities across the DeFi ecosystem.

Notable investments: Argent, Compound, Maker (MKR), Numerai, Optimism, StarkWare, Uniswap

Placeholder

Based out of New York City, Placeholder is a venture capital firm that specializes in blockchain and cryptocurrency investments. The company theorizes the “Crypto Era” is the next major tech market cycle after the Hardware, Software, and Networks Eras of the preceding decades.

Notable investments: 0x Protocol, Aragon, Fortmatic, Maker (MKR), Numerai, UMA, Zerion

Polychain Capital

Created by Olaf Carlson-Wee, Coinbase’s inaugural employee, Polychain Capital is a hedge fund focused on all things cryptocurrency. The firm aims to deliver “exceptional returns” from active management of blockchain asset portfolios.

Notable investments: Compound, Horizon Games, Paradigm Labs, Ren

Union Square Ventures

Union Square Ventures, or USV, is a venture capital firm that in recent years has started branching out to cryptoeconomy investments. The company was founded by Fred Wilson in 2003.

Notable investments: Arweave, Coinbase, Numerai, OpenBazaar

Lemniscap

Lemniscap, founded in 2017, is a VC firm specialising in investments in emerging cryptoassets & blockchain startups. Their investments span across the full stack with focus on DeFi, privacy and scalability protocols.

Notable investments: Futureswap, KAVA, The Graph, StakerDAO, Dharma

ParaFi Capital

ParaFi Capital, founded in 2018, is an alternative investment firm focused on blockchain and DeFi markets.

Notable investments: Aave, Synthetix, Maker, Uniswap, 1inch

The future of DeFi has never been more promising than it is today, and some VCs are taking notice and getting ahead of the curve. The aforementioned firms are well-positioned because they’re proven early arrivers in the arena, since DeFi’s wider enterprise possibilities are only just beginning. That said, expect many more VCs to dive into the ecosystem in the years ahead.

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About the author
William M. Peaster
William M. Peaster is a writer and curator of the DeFi Arts Intelligencer, a newsletter tracking Ethereum’s digital collectibles arena. He is not a financial advisor. The thoughts shared in this guest post are his opinions and reflect his personal experiences and personal optimism around Ethereum. He currently owns some cryptoart and ETH.

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