A group of veteran tech investors in India, including AngelList India’s Partner Utsav Somani, have joined hands to launch a dedicated crypto fund, called B1T Capital, with a size in ‘single digit USD million’.
Registered in the US due to its favourable regulations, B1T intends to invest in crypto companies in India and globally through private pre-sales. Almost all investors (barring a few) and capital of the fund are from India. Most part of the fund is already closed.
“Globally, it is estimated that there are going to be 500 new crypto funds in 2018. Interestingly, none from India. B1T Capital is a step towards changing that. India is the fast-emerging geography that the projects will need access to at some point in their maturity curve, and by partnering with us, we will open up India’s crypto ecosystem for them,” Somani, Managing Partner at B1T Capital, told e27.
With an average cheque size of US$75,000 to US$150,000 per startup, B1T aims to participate in over 25 projects across its two-to-three-year lifespan.
The crypto fund is going to target projects that have experienced sectorial investors like the large crypto funds (Polychain, Metastable, A16Z Crypto, etc.). The aim is to take a long view in the market and back projects that will take time to mature but have the potential to really redefine how the markets and protocol layers are organised and structured.
Somani clarifies that B1T will only participate in pre-sales of solid web 3.0 infrastructure layer projects. He believes the window of opportunity to invest in the base layer of such interesting new creations is very short and the fund aims to target investments in projects with good set of investors. “This is not a pool to do investments into unregulated, non-KYC-based projects and ICOs,” Somani he stated.
B1T has already invested in Orchid.com, which is trying to redefine how censorship can be removed from the internet to make it truly open as it was intended to be. This startup has already got the backing of some of the renowned investors (Sequoia Capital, A16Z, Polychain Capital, Blockchain Capital and more) and will it has no plans to go for a public sale.
According to Somani, what happened in crypto industry in 2017 was something extraordinary and almost resembled the wild wild west of fundraising. This led to many issues like governance, fake whitepapers and untraceable development teams, including some funny exit scams.
“What came out of this was the need of regulation and more importantly governance. If the projects want access to some of the best stable investors and not regular retail investors who’re looking to flip their early investments for more profits to reinvest in other projects. B1T Capital is born because of the need to pool capital to participate in such interesting opportunities that arise from the ‘venture capital’ moment in crypto,” he said.
Talking about the unfavourable regulatory conditions in India, Somani said that it is a “wait-and- watch” moment for the country’s crypto industry. “I hope that changes soon to fast and favourable — most of the crypto projects are taking flight and registering overseas — resulting in loss of talent, capital and the opportunity to be part of the next wave of internet projects.”