Singapore, SINGAPORE – Lightspeed Venture Partners, best known for its prescient investment in companies such as Snap Inc, the disappearing messaging app Snapchat that has sparked a string of copycats as well as similar features from competitors, has raised US$1.8 billion to invest in startups, including cryptocurrency startups. According to Reuters, the firm, buoyed by its success in spotting dark horses such as Snap Inc, has earmarked over half of the fund or US$1.05 billion to invest in more mature companies and has its eyes set on business expansion in Southeast Asia, targeting cryptocurrency companies among others. Southeast Asia, led by Singapore, has become a hive of cryptocurrency and blockchain activity, with Singapore maintaining its top three position as the world’s capital for initial coin offerings (ICOs), according to a recent PwC study.
Speaking to Reuters, Lightspeed partner Jeremy Liew, an early Bitcoin investor, noted that as startups stay private for longer periods, relying on venture capital instead of public markets for funding, firms like Lightspeed have had to double down on investments to maintain a seat at the table. According to Liew,
“That trend has only been increasing over time, and as a result our funds have been getting bigger over time as well.”
Unlike other venture capital firms, which have mostly seen their investment gains on paper, Lightspeed-backed companies have had 17 initial public offerings (IPOs) in the last five years, about half of which have occurred since the start of 2017. And while Liew made no mention of ICOs, the firm’s interest in cryptocurrency companies, will no doubt be driven by the ability to realize investment returns from public ICOs on cryptocurrency exchanges. According to one investor who is familiar with the matter and who spoke on condition of anonymity,
“ICOs are basically like IPOs, but at an accelerated pace and at a fraction of the cost.”
Although the cost of mounting an ICO has increased significantly in 2018, the interest in ICOs has not waned with the amounts raised via ICOs in the first quarter of 2018 outpacing all of 2017. Southeast Asia has been a particular bright spot, with many of the world’s biggest ICOs having taken place in Singapore.