Brevan Howard Digital, the cryptocurrency arm of a global asset management giant, and Galaxy Digital, a cryptocurrency company founded by billionaire Mike Novogratz, have both joined the Crypto Accelerator Alliance. I invested in Alliance’s third fund.
Alliance Fund III closed for the first time in February, receiving $20 million worth of commitments from Brevan Howard Digital and Galaxy Digital, according to March 26 Alliance Limited partner meeting slides obtained by The Block. A source with direct knowledge of the matter told The Block that each company has already invested $10 million in the fund, meaning it’s not just a commitment.
Fund III plans to raise another $80 million by July, bringing it up to $100 million, according to conference slides. It is expected to invest $500,000 per startup.
Alliance Fund III
Alliance’s third fund comes as cryptocurrency funding shows signs of a rebound after a two-year slump. Last month, cryptocurrency venture capital funding reached $1.4 billion, the highest in 18 months, according to The Block Pro’s Deals Dashboard.
As the cryptocurrency market rebounds, more venture companies are raising or raising new funds. Last week, 1kx raised $75 million to support early-stage cryptocurrency startups. Paradigm is reportedly discussing raising $750 million to $850 million for the new fund. Galaxy Digital, Hack VC, and Hivemind Capital are also reported to have raised $100 million, $100 million, and $50 million in new funding, respectively.
Alliance’s previous two funds
Alliance’s third fund is being raised following the success of the first two funds. Since its founding in 2020, the Alliance has accelerated 12 cohorts with over 200 startups.
The Alliance’s first fund supported high-profile startups such as Arbitrum, Immutable X, and Axie Infinity. The first fund raised $15 million in 2021 from Jump Capital, billionaire Mark Cuban and others. The fund’s invested capital soared by more than $90 million as of Dec. 31, 2023, 6.1 times its initial value, according to an obtained slide.
Fund II, which was still distributing as of Dec. 31, recently completed its distribution, according to the slides. They added that the second fund is valued at $30 million and was raised in 2022. Fund II has supported notable startups including Tensor, Hyperlane, and Story Protocol.
As a cryptocurrency accelerator, the Alliance provides mentorship and funding to startups selected from its cohort. The company recently opened its headquarters in New York City and is designed to help portfolio companies work with mentors and peers.
A number of high-profile investors are also backers of the Alliance, including Peter Thiel’s Founders Fund, Solana Labs co-founder Anatoly Yakovenko, Visa’s head of crypto Cuy Sheffield, and Brevan Howard Digital’s venture co-heads Peter Johnson and Colleen Sullivan. Go to the alliance homepage.
Johnson and Sullivan have individually been part of the Alliance, but this is the first time Brevan Howard Digital itself has invested in the Alliance, the sources said. Meanwhile, sources said Galaxy Digital is a repeat backer of the alliance, having previously secured a second fund.
Jocelyn Robancho, a key contributor to the Alliance and head of the accelerator, declined to comment. Spokespeople for Brevan Howard Digital and Galaxy Digital also declined to comment.
Disclaimer: The Block is an independent media outlet delivering news, research and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block continues to operate independently to provide objective, impactful and timely information about the cryptocurrency industry. Below are our current financial disclosures.
© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.