SPiCE VC has announced a new $250 million fund focused on blockchain that is five times larger than the company's first fund and structured to appeal to institutional investors. According to a press release provided to CoinDesk, the company will also launch a roadshow in Dubai to court potential backers.
The original SPiCE I fund was a $50 million tokenized vehicle (meaning that the fund's assets were tokenized to provide liquidity to investors) that began raising money in 2017, when blockchain technology in general was being used in the financial industry. The fund's portfolio included three companies that went public last year: digital security platform INX Limited, online lottery platform Lottery.com and crypto exchange Bakkt.
SPiCE II is being launched after blockchain use expanded to a broader range of industries, including gaming, retail, healthcare and supply chain management.
"The focus of [SPiCE II] is the same. We are investing in companies that are building key parts of the blockchain ecosystem, as well as companies that are building the infrastructure. Companies that are building on distributed ledger technology to significantly change industries," Tal Elyashiv, co-founder and managing partner of SPiCE VC, said in an interview with CoinDesk. "[But] the scope is much broader. So we expect SPiCE I to have more diversity than SPiCE II."
Structure and focus of SPiCE II
SPiCE II has a more traditional venture capital structure with a tokenized portion whose size is based on investor interest, Elyashiv explained. The larger size of the fund means SPiCE VC can take the lead in more rounds and invest in more companies than SPiCE I.
While SPiCE I was funded by family offices, small funds of funds and high net worth individuals, SPiCE II targets participation from institutional investors. SPiCE VC has already attracted investor interest in Dubai, where SPiCE has an office, making Dubai the natural starting point for the roadshow.
"The environment in Dubai is very vibrant. We've seen a lot of deals being done there relatively quickly, so it's a good place to start," Elyashiv said. "Dubai is also driving growth in terms of local adoption of blockchain. So there's a lot more awareness of blockchain [there] on a broader scale than just crypto."
The second SPiCE fund comes as crypto venture capital investments continue at a steady pace following record-breaking fund launches by Andreessen Horowtiz and Paradigm last year, despite the recent drop in digital asset prices. Cryptocurrency-focused VC firm Dragonfly Capital recently announced a third $650 million crypto fund, more than double the size of its previous fund.