$1.8B for Crypto at Lightspeed: Firms Raising Large Funds for Crypto and AI

Venture capital firm behind snapchat, Lightspeed is planning to set a brand-new cryptocurrency project that will be first of its kind for a premium venture company, an earmarked pool of cash within a bigger fund to be spent entirely and exclusively on crypto investments.

“We believe that just as the last three megatrends — mobile, social, and cloud — intersected and reinforced each other, so will the next three megatrends — next-gen computing devices, AI, and crypto.” — a16zcrtypo.com

A recent quote sums up the fervor in crypto among funds quite powerfully “The hedge fund financiers backing QI are far from the only City bigwigs putting cash behind AI and related fintech projects.

In May, the Swiss bank UBS said it was moving 80 staff into a new artificial-intelligence division, dubbed the Strategic Development Lab, which is dedicated to defending its fixed-income trading turf against hungry fintech startups.

Later the same month Deutsche Börse, the German stock exchange, said it had earmarked €270m for investment in big data analysis, blockchain, robotics and AI.

Meanwhile, the City Corporation’s top envoy to the EU, Jeremy Browne, said late last month that he thinks AI will be more disruptive to UK financial firms than Brexit, in the long term.

Quant Insight and its backers are betting that banks and asset managers will also tap into new tech by buying in services like the one it offers. The analytics firm said it has grown customer numbers by 50% this year, and has added new staff to sell its services in Asia and the US.

It is also working with “major banks” on creating bespoke indexes and equity baskets — groups of stocks that share certain characteristics and are likely to move in a similar way in response to given macro events.”

As more funds focus on AI and cryptocurrencies, just as our fund has done for the last 4 years, we anticipate a consolidation of quality with funds focused on high-end crypto technologies that utilize AI, NLP and Machine Learning. A few examples of cryptos that funds like Lightspeed and other might be looking at might be similar to Matrix AI, Vectorspace AI or SingularityNet [ link ].

A leader in the pack of funders set to add rocket fuel to crypto is Lightspeed Ventures, a point-of-sale and e-commerce software provider based in Montreal, Quebec, Canada. They provide small and medium-sized retail and restaurant businesses with a point of sale solutions. The company in the back of hits like Snap has been exploring three other choices as a part of an effort led via partner Aaron Batalion to tremendously scale up the company’s activity within the area.

Sources predict that instead of creating an entirely separate fund, the company would seek the newly raised fund and save some of the cash crypto deals exclusively. But the final plans have not been decided yet.

Venture capitalist face struggles all along the way, the internal deliberation faced by Lightspeed is just another small example.

A spokesperson of Lightspeed said in a statement: “We’ve been making many investments in the fintech space over the past several years, including Affirm, Blockchain, Basis and more that are unannounced. Blockchain-based technologies are a huge area of interest for us and we have partners focused on this. In terms of a dedicated crypto fund, we have nothing to announce at this time.”

The company is focusing on three major options, a crave out, a new fund, and spinout:

A carve-out: partners of Lightspeed made it transparent to the industry gurus about their intention to ramp up quickly, their investing in blockchain based startups. Also, the company is figuring out some way to frame itself in such a way to reflect the new marketing. The company is having an affinity towards this option for crypto, according to a person who is aware of this fact.

A new fund: In the recent month Lightspeed has examined the possibilities of launching an entirely new, separate and different fund that would concentrate entirely and exclusively on crypto investments. People who are close to the firm and people who are aware of the fact states that Lightspeed is considering this option for the current scenario at least.

A spinout: close acquittance of Batalion wants to launch a new crypto project on his own which will not carry the Lightspeed brand name. after stepping out of Lightspeed as the general partner he will utilize the existing funds to start his own venture. This is very conventional and predictable move; venture capitalists usually start their own firm after some point to get more power over the funds they have raised.

In 2015 Battalion become a part of Lightspeed after co-founding LivingSocial, which Lightspeed backed. He also got involved with other non-crypto companies, leading investments into companies like aircraft company R2Air.

The firm disclosed in a filing in March that it is raising up to $1.8 billion for its twelfth venture fund along with a select fund for later-stage opportunities. But it has not yet formally announced the fundraising. Batalion is one among the many investors at Lightspeed. Jeremy Liew guided the Lightspeed to stay ahead of the competitors over the last few years.

However, sources reported the firm is participating in the initial coin offering at Telegram and last month backed the initial coin offering at Basis, which raised $133 million.