Exclusive: One Of The First Blockchain-Focused VCs Targets New $50 Million Fund
Over the past four years, through the crypto market’s violent ups and downs, some investors haven’t lost faith. One of them is New York venture capital firm Future Perfect Ventures (FPV). For its second fund, it has secured about $25 million to invest in startups focused on blockchain, the technology that underpins cryptocurrencies. High-profile backers like Marc Andreessen, Chris Dixon and Chris Sacca contributed to the fund, which aims to raise $50 million, according to a person familiar with the matter.
FPV founder and managing partner Jalak Jobanputra, 45, worked in investment banking before she started funding early-stage tech startups in the late 1990s. She continued investing through 2013, when she attended her first bitcoin conference, and she saw crypto’s potential earlier than most VCs.
She thinks her diverse background helped. “As an immigrant, as a woman, as someone who had experience in tech, I felt we were going to be well positioned,” she says. “I had spent a lot of time in emerging markets and Silicon Valley, so I was able to bridge cultures and look at the world from a macro perspective.”
Alongside venture investors like Pantera Capital, Blockchain Capital and Digital Currency Group, Jobanputra launched one of the first blockchain-focused VC funds. In the fall of 2014, she bought stakes in blockchain-based payment platform BitPesa and crypto trading app Abra.
One of her earliest investment theses was to focus on the business-infrastructure startups that would help the nascent industry develop. She backed London-based electronic wallet company Blockchain, which now has more than 28 million accounts holding crypto assets. She sunk more than $500,000 into Blockstream, a company focused on making bitcoin transactions faster and cheaper.
In her second fund, Jobanputra has invested in several infrastructure startups. Seattle-based Strix Leviathan makes crypto trading software. Invisible Labs is building a custody solution for crypto assets. Everledger tracks the origin of high-value assets, like diamonds. India-based Unocoin is a crypto trading platform. Harbor aims to take hard-to-trade assets like real estate and private equity and turn them into tokenized securities.
She also played the infrastructure angle in her pre-blockchain days when she invested in companies like supply-chain software firm Viacore and financial services software company Yodlee. IBM acquired Viacore in 2006, delivering a four- or five-fold return for Jobanputra. Yodlee went public in 2014 and returned more than ten times her investment.
In four years, Jobanputra says, FPV’s first fund has increased in value by about two and a half times. Those unrealized gains rank in the top 10% of all VC funds launched in 2014, according to Pitchbook data.
One early crypto company that Jobanputra didn’t get a piece of is trading platform Coinbase. In 2014, she was investing only when she could be the “first money in,” at the “seed” stage. Two years earlier, Coinbase had already done its seed round with investors like Reddit cofounder Alexis Ohanian and former Y Combinator partner Garry Tan.
Today, above all other criteria, she looks for entrepreneurs who are passionate about the space. “From 2014 to 2017, there was a deep crypto winter,” she says, referring to a period when bitcoin traded well below its 2013 peak. “That required a lot of resilience and a real passion for what they were building.” Jobanputra says 90% of the startups she has funded have gone on to raise more money. “That shows we backed entrepreneurs who were in this for the right reasons,” she says. “They were generating revenue and breaking even when there wasn’t capital readily available.”
Jobanputra also cares deeply about diversity. She’s chair of the Collective Future, a group of women advocating for diversity and inclusion in crypto and blockchain. “It’s imperative that my portfolio companies take the issue of D&I seriously,” she says. In her first fund, more than 50% of her portfolio company’s founders were women, and 10% were underrepresented minorities. In her second fund, four of the nine founders she’s backing are women.