Despite their rich engineering talent, Blockchain entrepreneurs in the EU often struggle to find backing due to the dearth of large funds and investment expertise in the space. But a big move takes place at an EU level today, as the European Investment Fund makes a significant investment into a blockchain and digital assets venture fund.
Fabric Ventures, a Luxembourg-based VC billed as backing the “Open Economy,” has closed $130 million for its 2021 fund, $30 million of which is coming from the European Investment Fund (EIF). Other backers of the new fund include 33 founders, partners, and executives from Ethereum, (Transfer)Wise, PayPal, Square, Google, PayU, Ledger, Raisin, Ebury, PPRO, NEAR, Felix Capital, LocalGlobe, Earlybird, Accelerator Ventures, Aztec Protocol, Raisin, Aragon, Orchid, MySQL, Verifone, OpenOcean, Claret Capital, and more.
This makes it the first EIF-backed fund mandated to invest in digital assets and blockchain technology. EIF Chief Executive Alain Godard said: “We are very pleased to be partnering with Fabric Ventures to bring to the European market this fund specializing in Blockchain technologies… This partnership seeks to address the need [in Europe] and unlock financing opportunities for entrepreneurs active in the field of blockchain technologies – a field of particular strategic importance for the EU and our competitiveness on the global stage.”
The subtext here is that the EIF wants exposure to these new, decentralized platforms, potentially as a bulwark against the centralized platforms coming out of the US and China. And yes, while the price of Bitcoin has yo-yo’d, there is now $100 billion invested in the decentralized finance sector and $1.5 billion markets in the NFT market. This technology is going nowhere.
The fabric hasn’t just come from nowhere, either. Various Fabric Ventures team members have been involved in Orchestra, the Honeycomb Project at Sun Microsystems, Tideway, RPX, Automic, Yoyo Wallet, and Orchid. Richard Muirhead is Managing Partner and is joined by partners Max Mersch and Anil Hansjee. Hansjee became General Partner after leaving PayPal’s Venture Fund, which he led for EMEA. The team has experience in token design, market infrastructure, and community governance. The same team started the Firestartr fund in 2012, backing Tray.io, Verse, Railsback, Wagestream, Bitstamp, and others.
Muirhead said: “It is now well acknowledged that there is a need for a web that is user-owned and, consequently, more human-centric. Astonishing people are crafting this digital fabric for the benefit of all. We are excited to support those people with our latest fund.”
On a call with TechCrunch, Muirhead added: “The thing to note here is that there’s a recognition at European Commission level, that this area is one of geopolitical significance for the EU bloc. On the one hand, you have the ‘wild west’ approach of North America, and, arguably, on the other is the surveillance state of the Chinese Communist Party.”
He said: “The European Commission, I think, believes that there is a third way for the individual, and to use this new wave of technology for the individual. Also, for businesses. So we can have networks and marketplaces of individuals sharing their data for their own benefit and businesses in supply chains sharing data for their own mutual benefits. So that’s the driving view.”