Huobi Ventures, Chainsmokers back new $25 million fund investing in the metaverse

Count this as a sign that the metaverse is gaining traction among the institutional investor community. 

OP Crypto Capital Management — a $25 million fund focused on the nascent corner of the crypto market — emerged from stealth Monday, announcing in a press release backing from Huobi Ventures, Galaxy Digital, Digital Currency Group, Asian investment consultancy The Brooker Group, and Bybit's venture arm Mirana Ventures. 

OP is led by David Gan, a former Huobi executive who played a role in various aspects of the exchange's business including its principle investment strategy as a director. He also served as managing director of Huobi Labs, which incubates early stage blockchain companies. 

In his new seat at OP, Gan is keen on working with early stage blockchain companies once again. The firm's investment mandate covers decentralized finance, Web 3.0, and the metaverse — a catch-all phrase that refers to online virtual experiences and environments.

Gan said he is looking to differentiate his fund from others by bridging the gap between US-based founders and the crypto communities in Asia. He also plans to play a more active role in the life cycle of his portfolio companies, offering support in token listings and the creation of institutional fund products for new tokens. 

As for where he is placing his bets, Gan said he is looking to back companies bringing interoperability and more unique experiences to the metaverse. 

"They want in-game items to be transferred and there needs to be infrastructure for the rules that allow that," he said. "Ultimately, people are looking for more niche and focused experiences." 

Projects like Decentraland allow users to congregate in an online world where users can buy pieces of land. Those transactions are tracked on the Ethereum blockchain. Gan has already made a bet in the wider metaverse space, investing in Solana-based metaverse project Stardust, which allows game developers to create games with blockchain assets. 

"Gaming will bring the first 100 million users to the crypto ecosystem," Gan said. "The metaverse, social tokens, virtual reality will bring the next billion."

He's convinced not only institutional investors on this thesis, but also music artists Alex Pall and Andrew Taggart of the Chainsmokers are also backing the fund, according to Gan. 

"They have done extremely well, but they can only play so many shows. And those shows have limited capacity. The metaverse allows them to reach millions and millions of users globally," Gan said.