Despite the recent tightening of chains at the Brooklyn-based venture capital firm, ConsenSys, the company's investment arm is increasing the reach of independent startups.
ConsensSys Ventures, led by managing partner Kavita Gupta, announced two new investments on Thursday: $ 1 million in the cryptographic portfolio and Coinhouse trading platform in Paris and an undisclosed figure in the Tenta browser based on cryptography.
Gupta told CoinDesk that these companies have distinguished themselves with teams that include bitcoin veterans who serve well-established user bases. According to Coinhouse, the platform has over 150,000 user accounts. In addition, the CEO of the startup, Nicolas Louvet, was an early investor in the startup LEDger of the hardware portfolio. Ledger CEO Éric Larchevêque was a mutual investor in Coinhouse and both now form part of the boards of directors of their respective companies.
"A solution for the custody of the transaction [Ledger] working with the exchange [Coinhouse] … it's very important for how ConsenSys Ventures think about investing, "Gupta told CoinDesk in an interview on Thursday.
As for Tenta, which has an integrated VPN, ad blocking and complete data encryption, Crunchbase lists the browser with at least 61 489 downloads. The launch of the recessed portfolio ConsenSys MetaMask is already in talks with Tenta about how the mobile browser of this last one can include embedded cryptographic portfolios.
"Our mission to make fast and ubiquitous private and secure browsing received tremendous impetus with the support of ConsenSys to expand to other platforms while continuing to innovate the new privacy features," Tenta CEO Jesse Adams said in a statement .
ConsenSys Ventures was launched in 2017 with $ 50 million to invest in start-ups that would complement those under the main umbrella of ConsenSys, with a similar mission to help build the ethereum ecosystem. Since then, Gupta has stated that its seven-person team at ConsenSys Ventures has distributed approximately $ 14.5 million in 14 projects, noting that there are still some shareholder agreements in the final stages of completion.
These agreements cover early-stage projects that have graduated from the inaugural cohort of the ConsenSys Tachyon accelerator program, which took place in San Francisco in 2018. Gupta said that his fund will allow teams to gather from outside venture companies and then compare that rating to buy 7% of equity, as just an example of the type of operations in progress.
As a result, Gupta's strategy is to bring all the traditional venture capitalists into ConsenSys' orbit as much as possible, to take advantage of their experience with traditional technology products.
"We helped many VC funds to think through their investment thesis and we introduced them into the ecosystem," he said, adding:
"In many of our investment agreements lately, we have invited many of our friends and other funds that we respect and have participated in."
In fact, the ConsenSys Venture portfolio now shares mutual investments with Coinbase Ventures, Intel Capital, Sequoia, General Catalyst, Kindred Ventures, Betaworks, 122 West, La Famiglia and Paradigm, to name a few.
For Coinhouse, the Gupta team managed a $ 2.8 million A series with additional funding from the Digital Currency Group, XAnge Siparex Innovation and the BTU Protocol Ecosystem Fund, along with numerous angel investors. (Full disclosure: DCG is the parent company of CoinDesk.)
Meanwhile, over 60 applications are already coming for the upcoming Tachyon program in Berlin this year. Gupta said that more than 200 projects were presented for the first cohort and expects that there will be an equal number for Berlin when applications close in February.
More than anything else, Gupta said that the first Tachyon program has taught his team what they are looking for in an investment. That is to say, they want startups that can raise capital and manage activities themselves, without relying solely on the portfolio of ConsenSys' founder, Joe Lubin.
"We will invite other founders from both sides of the community to talk about being entrepreneurs, raise funds," said Gupta. "We are inviting 10-12 founders who have had excellent outputs from their company, excellent raises of the B series, to talk about this experience."
In a sense, this is consistent with the old ConsenSys strategy, which was based on partnerships within the Lubin network and considered portfolio companies as strategic partners. For example, several projects incubated with ConsenSys became the first users to test loans facilitated by the BlockFi portfolio company. Portfolio companies sometimes work directly with ConsenSys' teams for consultancy and product creation, regardless of whether the results remain in-house at ConsenSys or subsequently translated into external portfolio companies.
"It's very close-knit," said Gupta. "They [Coinhouse] it will also work with other trading products, portfolio products, custody and settlement solutions that have been incubated by ConsenSys. "
Going forward, Gupta says he is trying to prioritize investments in startups that focus on three aspects: infrastructure, privacy and network effects.
Speaking of ethereum in general, he added:
"For us, we want to focus on what will lead to adoption".
Kavita Gupta at Tachyon Demo Day 2018 image via ConsenSys Ventures