Open Web Collective launches venture capital arm to back Web3 startups

On Sep 19, 2022

Open Web Collective, a venture capital firm focused on backing blockchain startups, has launched a new division called OWC Ventures.

The launch of the division was reported today by TechCrunch.

Open Web Collective makes investments in early-stage blockchain companies and also operates a startup accelerator program. The firm launched as a spinout from the NEAR Protocol blockchain project. According to Open Web Collective, the startups in its portfolio have raised more than $360 million from investors.

OWC Ventures, Open Web Collective’s new venture arm, will focus on investing in early-stage Web3 startups. OWC Ventures is reportedly backed by NEAR Protocol as well as Digital Currency Group. Digital Currency Group is the parent company of several major players in the digital asset ecosystem including Grayscale Investments, an investment firm focused on cryptocurrencies.

OWC Ventures is reportedly in the process of raising a fund for backing pre-Series A startup investments. The division estimates that the fund will launch with $20 million in initial capital.

As part of its investment strategy, OWC Ventures intends to back startups in several different parts of the digital asset ecosystem. OWC Ventures will back startups developing DeFi technologies, or technologies that make it possible to trade in financial instruments without intermediaries such as brokerage firms. The division will also invest in startups focused on video games and SocialFi, the term for products that combine social media features with blockchain technology.

The launch of OWC Ventures comes a few weeks after it was reported that venture capital firm Seven Seven Six is seeking $177.6 million for a cryptocurrency investment fund. Previously, Variant raised $450 million to back Web3 and DeFi startups.

In May, storied venture capital firm Andreessen Horowitz debuted the industry’s largest-ever blockchain venture fund. The fund launched with $4.5 billion in initial capital, which the firm will use to back Web3 startups “at every stage.” To date, Andreessen Horowitz has secured a total of $7.6 billion from investors to make Web3 investments.

Web3 startups raised $6.6 billion in funding during the second quarter, according to Crunchbase research. That represents an improvement over the $6.4 billion invested in the segment the same time a year earlier. It’s estimated that there are currently 79 unicorn startups, or startups with valuations exceeding $1 billion, in the Web3 ecosystem.

One of the latest Web3 startups to have achieved a unicorn valuation is Mysten Labs, the developer of the Sui blockchain. The startup earlier this month raised a $300 million funding round led by FTX Ventures at a $2 billion valuation.