Skip to main content

These two VCs were hobby Bitcoin miners a decade ago, and now they've raised $110 million for a second fund focused on cryptocurrencies and blockchain startups

* On Monday, venture firm Electric Capital announced that it had raised a $110 million fund focused on crypto technologies. * The firm plans to invest in cryptocurrencies, blockchain-based businesses, fintech companies, and marketplaces. * Avichal Garg and Curtis Spencer, Electric Capital's co-founders, said that their investments could reshape legacy banks, emerging markets, and even social networks.  * Visit Business Insider's homepage for more stories. In 2010, when Bitcoin seemed like just another tech fad or pipe dream, Avichal Garg and Curtis Spencer started mining for the cryptocurrency as a hobby. Garg and Spencer spent those early crypto days working together at Spool, the software startup that they co-founded and that was acquired by Facebook in 2012.  But even as the traditional software sphere still beckoned, the two never strayed too far from the crypto world. By the time 2017 came around, Garg and Spencer were angel investors in a handful of cryptocurrencies and blockchain startups. By 2018, they had formalized their investments by launching Electric Capital, an early-stage venture firm that invests in cryptocurrencies, blockchains, marketplaces, and fintech startups, as well as non-crypto startups, like Cruise and Notion.  On Monday, Electric Capital announced that it had just raised $110 million for its second fund, making the firm one of the few (along with Andreessen Horowitz) to have a fund earmarked for cryptocurrencies and startups working with blockchain technology. They plan to invest in cryptocurrencies like Bitcoin, as well as blockchain-based businesses, fintech companies, and marketplaces. Celo, NEAR Protocol, and Bitwise are among the firm's recent investments.  Garg and Spencer said that they couldn't reveal the names of their investors, but they said the new fund has garnered significant support from university endowments and nonprofits. As legacy banks look to revamp their traditional systems, VCs are placing bets on which fintech startups will help to usher in a new era of payments and banking. In a Zoom interview with Business Insider, Garg and Spencer said they hope that their investments will help reshape the ways in which money is stored and exchanged. Legacy banks like JP Morgan are thinking about rebuilding their 50-year-old systems with the 2020's hottest technology, Garg said. Spencer said he believes that the use of cryptocurrencies and blockchain technology could make it easier to send money to emerging markets, including countries like Nigeria and Mexico.  People should also expect to see the rise of companies like CryptoKitties, a blockchain game that raised $12 million from VC firms like Andreessen Horowitz in 2018, Garg and Spencer said.  Cryptocurrencies and blockchain technology have grabbed the attention of big tech companies, Spencer added. Currently, Garg and Spencers' former employer, Facebook, is attempting to obtain regulatory approval for Libra, a blockchain digital currency and network that's still in its primitive stages, and has faced significant pushback from regulators and lawmakers, as The Informaton reported.  While Garg and Spencer say they believe cryptocurrencies and blockchain technologies will reshape fintech and marketplaces, they also said that the technology could impact other sectors.  "Eventually, it will get to things like social media," Garg added.  Garg and Spencer said that they are optimistic about the future of cryptocurrencies and blockchains, but the jury's still out on how different countries plan to regulate digital currencies.  In recent years, the federal government has been stepping up its monitoring of cryptocurrencies and initial coin offerings. A number of federal agencies, including the SEC, FTC, and IRS, are in charge of regulating blockchains and cryptocurrencies. The federal government has allowed individual states to introduce their own blockchain-related legislation.  Some countries, including China, Russia, and Colombia, have banned Bitcoin and other cryptocurrencies, and India is reportedly considering a ban on cryptocurrencies as well. SEE ALSO: A former Apple TV designer built a livestreaming startup to challenge Twitch, and he's betting the key to winning will be live rap battles SEE ALSO: The latest class of successful young fintech investors reveals how to land a job in the notoriously exclusive field Join the conversation about this story » NOW WATCH: Here's what it's like to travel during the coronavirus outbreak
https://bit.ly/2PkQoQy

Popular posts from this blog

PayPal parts with top advertising executive after shifting its marketing strategy during the pandemic

* PayPal's chief creative officer Steve Simpson, its top advertising executive, left the company after about a year. * The move came after PayPal shifted its marketing strategy during the coronavirus pandemic, placing less emphasis on the brand and more on catering to small businesses, said a source with direct knowledge of the marketing operation. * Simpson's departure followed that of CMO and former Apple executive Allison Johnson in May. Both "decided to leave PayPal" as the company streamlines its global marketing functions, according to a PayPal spokeswoman. * Visit Business Insider's homepage for more stories. PayPal's highest-ranking ad executive Steve Simpson left earlier this month after just over a year as part of a restructuring of its global marketing business. Simpson, who was chief creative officer, was hired to make high-minded ad campaigns to help PayPal stand out from competitors like Square, Stripe, and Apple Pay. But this strategy chan...
Read more

TikTok confirms it will sue the US government, alleging Trump failed to provide 'due process' before issuing ban

* TikTok confirmed Saturday that the company planned to sue the US government over President Donald Trump's executive orders targeting the popular app. * A company spokesperson said TikTok experienced "a lack of due process as the administration paid no attention to facts and tried to insert itself into negotiations between private businesses." * TikTok, which has surged in popularity over the past year, was known as Musical.ly until it was purchased by the Chinese company ByteDance in 2017 and renamed. * The president on August 6 and August 14 signed executive orders targeting TikTok.  * Visit Business Insider's homepage for more stories. TikTok on Saturday announced it plans to sue the US government over President Donald Trump's executive orders pertaining to its ownership, arguing the company was deprived of its due process rights. The president, who began targeting TikTok in July, issued an executive order August 6 making it illegal for American compani...
Read more

A pair of former champions headline UFC Fight Night: Munhoz vs Edgar — How to watch

  * UFC Fight Night: Munhoz vs Edgar will be streamed live on August 22, exclusively through the ESPN+ streaming service. * In the main event, former UFC Lightweight champion Frankie Edgar will make his debut in the bantamweight division in the 27th match of his UFC career. * With 13 career wins by knockout or submission, 5th ranked Pedro Munhoz is the former Resurrection Fighting Alliance bantamweight champion and one of the UFC division's most formidible fighters. * Prelims are set to start at 6 p.m. ET and the main card is scheduled to begin at 8:30 p.m. ET. * Every UFC Fight Night event is included with an ESPN+ subscription, which costs $6.99 per month or $49.99 per year. Product Card Module: Monthly Subscription Service Card size: small Former UFC lightweight champion Frankie Edgar will make his bantamweight debut against #5 ranked Pedro Munhoz in the main event of UFC Fight Night: Munhoz vs Edgar on August 22. Munhoz has dominated opponents in his 18 career wins...
Read more