FTX Derivatives Exchange Launches $2B Venture Fund, Taps Amy Wu as Lead
The FTX derivatives exchange is once again going all out in its backing of innovative crypto protocols with the launch of a $2 billion venture fund. Just as is expected, players in the digital currency ecosystem are repositioning for another historic year in terms of venture capital funding.
While FTX has its allied partner, Alameda Research which backs early-stage startups in the cryptocurrency ecosystem, the Venture Fund launched by the Sam Bankman-Fried led firm follows a similar move by Coinbase Global Inc (NASDAQ: COIN) which floated its venture capital unit back in 2018.
In a bid to give the new fund a good head start, FTX onboarded Amy Wu, a former partner at venture capital firm Lightspeed, to lead the new business unit and fund. Wu has a lot of experience as she was instrumental as one of the major thinktank at Lightspeed which has backed over 400 projects since its inception back in 1999.
Wu has given an insight into her action calls as she takes over the helm of affairs at FTX Ventures. According to her, the fund will make strategic, concentrated bets into companies in the crypto market.
“It’s not necessarily tied to the strategy of FTX,” she said. “The objective is more to accelerate the adoption of blockchain technology.”
The fund will notably back new projects with a little as $100,000 to hundreds of millions of dollars.
“We want to be known for the value add that we bring, leveraging the resources, the expertise, and the global network of FTX,” she added.
While it is yet unclear the very first companies or startups that will be backed by the new venture, Wu says she is particularly interested in those focused on “advance global blockchain and web3 adoption, with a broad investment mandate across social, gaming, fintech, software, and healthcare.”
FTX Venture Fund: a Product of Investor’s Fund
It takes a profitable and highly liquid company to float a venture capital fund, and profitability can best be described as the tale of FTX throughout last year. The company will achieve a valuation of $32 billion if the firm is able to pull a new $1.5 billion funding according to sources, a level that will complement the massive accrual of venture funds in 2021.
The deep liquidity of the exchange owing to the backing from its investors accounts for why it could make key acquisitions including LedgerX last year and also float the current venture fund being managed by Amy.
In an industry that is already awash with so many funds, the $2 billion earmarked funds by FTX for its venture funding unit will further contribute to the overall outlook of the crypto-investment scene. Perhaps with the new fund, the industry will surpass the more than $25.1 billion that was committed to about 1,700 venture capital deals last year.