VC firm to include cryptos in $1.8 billion investment
US venture capital firm Lightspeed Venture Partners has raised $1.8 billion, which it plans to invest in start-ups in various fields including digital currency, according to a Reuters report.
Menlo Park, California-based Lightspeed, which was set up in 2000, told Reuters that $1.05 billion of the new funding will be allocated to invest in more mature companies. The firm plans an expansion to Southeast Asia by contributing to companies active in fields including cryptocurrency and biotechnology, as well as the cosmetics industry.
The venture capital firm provided $485,000 seed financing for Snapchat owner Snap, subsequently attracting headlines as it enjoyed a huge windfall when Snap held its initial public offering (IPO) in March 2017.
This payback reflects Lightspeed’s investment strategy, which typically funds small to medium scale enterprises where the potential of an enormous return is high. The fund also holds a stake in blockchain-based payments processor Ripple Labs.
As start-ups rely on funding from venture capital rather than public markets, Lightspeed typically invests in a company repeatedly over several years to maintain a significant ownership interest. Jeremy Liew, a Lightspeed partner, told Reuters that such a trend “has only been increasing over time, and as a result our funds have been getting bigger over time as well.”
The partners stress that it will be a challenge for Lightspeed to meet performance expectations due to the success of their previous funds, which have returned $2.7 billion to investors since the beginning of 2017.
According to Reuters, companies supported by Lightspeed have conducted 17 IPOs over the past five years. Liew commented: “If you point to one moment in time for the firm it was probably the Snap IPO. But really, it’s a decade of hard work and it all came to fruition at the same time.”
Last year, Liew proposed investment in bitcoin (BTC), which he predicted would reach $500,000 by 2030. He said then that “BTC and the other digital currencies, they all really see a lot of benefit in times of political and economic instability.”