Lightspeed Faction’s Inaugural Fund
Lightspeed Faction, a crypto-focused venture capital firm established in partnership with Lightspeed Venture Partners, has launched its first fund valued at $285 million.
The firm’s primary focus will be on investing in early-stage crypto and blockchain startups, providing support for their seed and Series A funding rounds. They are open to investing across various crypto verticals, prioritizing projects utilizing blockchain technology to deliver tangible utility to users and businesses.
Investment Strategy
The firm is agnostic when it comes to investing in specific industry verticals, aiming to identify projects that can positively impact the ecosystem and drive blockchain innovation forward. The focus includes DeFi, infrastructure, NFTs, and others, with a commitment to conducting thorough due diligence before investing.
Lightspeed Faction had its first close in July 2022 and achieved the final close in July of this year. The fund was oversubscribed, surpassing its original $250 million target.
Long-term Vision
Faction’s investment approach is long-term, with a belief in the vast impact of crypto as a generational technology trend. Despite recent market rallies, the firm remains focused on long-term value creation within the crypto space.
Deployment and Support
The firm has already deployed approximately 20% of the fund, with investments in companies such as Crossmint, Lens, Matter Labs, Narya.ai, and Skip.money. It aims to fully deploy the fund over three-plus years, focusing on both equity and token projects.
The average check size ranges from $5-10 million but can be adjusted based on project needs. In addition to capital investment, Faction provides guidance in areas such as tokenomics and business scaling.
Dedicated Limited Partner Base
While sharing some resources with Lightspeed Venture Partners, Lightspeed Faction has its dedicated limited partner base and complete investment discretion over the fund. LPs include fund of funds, endowments, family offices, and corporates both inside and outside the crypto industry.
Industry Developments
Standard Chartered bank’s SC Ventures and SBI Holdings have also announced a $100 million vehicle to invest in crypto startups today.
Hot Take
Lightspeed Faction’s $285 million inaugural fund demonstrates continued bullishness in the crypto market. With a long-term vision and flexible investment approach, they are poised to play a significant role in shaping the future of blockchain innovation and utility delivery within the industry.
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