'Old money has all but fled,' Huobi co-founder discusses challenges of running $400M VC fund
In a brand new Twitter post dated Dec. 12, Du Jun, co-founder of cryptocurrency alternate Huobi World, shared new perception on his expertise of working ABCDE Capital, a $400 million Internet 3.0 enterprise capital (VC) fund, in June this yr. Based on Jun, the concept for ABCDE Capital got here in March, and by April, it was already registered in Singapore. Nonetheless, amidst the $40 billion Terra Luna implosion in Might, Jun mentioned that “previous cash has all however fled” after the incident.
We selected to begin @ABCDECapital on the most tough time of the market. Hope to convey a glimmer of sunshine to builders and convey extra equity, innovation and power to crypto business. https://t.co/GmxFFsG7qL
— Du Jun (@DujunX) June 17, 2022
Undeterred, Jun continued that in August, the VC fund was absolutely operational, with “a number of companions pooling tens of hundreds of thousands of {dollars} to speculate.” Whereas an preliminary report early November revealed “superb” outcomes, Jun mentioned that the following collapse of FTX was “far past expectations” for the business:
“Layoffs, wage cuts, and contraction turned essential themes for crypto corporations. One thought the feud between FTX and Binance would encourage wholesome business improvement, but it surely turned out FTX was so weak that it simply straight-up surrendered, bringing a wave of disaster. At the moment Binance has over 75% market share, and whether or not he likes it or not, CZ’s [Binance CEO Changpeng Zhao] angle in the direction of regulation represents that of the whole business, and it is an enormous problem for CZ.”
With regard to decentralized finance, or DeFi, Jun attributed final summer season’s increase to quantitative easing (QE) measures of the U.S. Federal Reserve. Tying it to regulation, Jun mentioned that DeFi progress occurred largely attributable to corporations corresponding to Coinbase, Circle, Grayscale, and Paxos “actively embraced regulation” and allowed giant institutional buyers to enter the house towards the backdrop of QE.
“FTX’s implosion made conventional previous cash and authorities companies afraid, and even disgusted, by the chaotic and orderless realm of crypto. For a very long time thereafter, governments wouldn’t help relaxed insurance policies that help improvement and innovation in crypto, nor would sovereign wealth funds make investments out there.”
Jun additionally revealed that since ABCDE Capital started investing in August, the agency has since amassed seven corporations in its portfolio within the safety, knowledge, social, zero information, and nonfungible tokens sectors. “ABCDE solely invests in 15-20 corporations per yr; a great agency isn’t afraid of the bear market, referrals are welcome, let’s proceed!” wrote the co-founder.
