This deep into the crypto winter has seen few debuts from major venture capital funds, a far cry from previous years. But the freeze hasn’t stopped some venture capitalists from launching new funds aimed at the decentralized technology market.
Dispersion Capital has assembled an initial $40 million fund to invest in decentralized infrastructure, the company told MinRegion exclusively. The venture vehicle is supported by Web 2.0 and web3 entities, including WeMade, Circle Ventures, Ripple, Alchemy Ventures, NGC, and individual general partners. It will focus on deploying capital in pre-seed and seed rounds and has already deployed 10% of the fund.
The evolution of blockchain infrastructure technology is slow, said Patrick Chang, founder and managing partner of Dispersion Capital. “We believe there is so much more to be built.”
Blockchains and decentralized computing are still very new, Chang added, arguing that they still have “a lot of missing pieces.” According to him, the existing blockchain infrastructure technology was built bit by bit, something that new development work that brings Web2.0 “know-how” to web3 could help harmonize.
During the 2021 crypto bull market, many startups were formed to build NFT projects, decentralized finance protocols and more, but few of the early stage tech companies focused on the underlying infrastructure itself, Chang said. “What was frustrating for users and people coming into web3 was onboarding, scalability and hacks. The infrastructure was incredibly immature and people weren’t thinking about it.”
Fast forward to today and there is a plethora of startups and developers working to improve the web3 infrastructure.
Dispersion plans to deploy its fund to startups that want to help new crypto users with technology such as revamped data infrastructure, cybersecurity, and smart contracts.
While it primarily looks at US-based companies, Dispersion is also actively investing in other regions, Chang said. About a quarter of its active investments are in Israel, but the company is also eyeing Asian-based builders, given the proliferation of developments for ZK, or zero-knowledge technology, in that region, Chang noted.
“The mission for us is how we can take web3 to a level similar to cloud computing, that it’s invisible technology that not everyone realizes they’re using, but they are,” Chang said. “Long term, the focus is on how we bring web3 to the masses [to] one billion users.”