European VCs are finally launching crypto funds — what took them so long?

Quick Take

  • While Europe’s venture scene has been slow to launch sizable crypto funds comparable to those in the U.S. and Asia, this is finally changing.
  • In the past year, we’ve seen large capital raises from not only the continent’s web3-native venture firms but also generalist funds. 
  • Still, issues remain: in some jurisdictions would-be crypto funds struggle to custody tokens and slow regulators have hampered rollout. 

As crypto's last bear market was drawing to a close, 1kx, a crypto fund that’s backed Matter Labs, Gnosis and Qredo, held an invite-only crypto summit as part of 2019’s Berlin Blockchain Week.

1kx founding partner Lasse Clausen extended an invitation to most of the venture capitalists he knew, aiming to school them on blockchain technology. Only one showed up.

“European VCs completely slept on blockchain,” says Clausen, “That meant most VCs didn’t have the mandate from their limited partnership agreement to buy tokens”

Kicked into gear by last year’s bull market, European VCs are finally beginning to roll out crypto funds and taste token exposure as the size of Europe’s blockchain scene continues to swell.

Europe surpassed Asia in the global share of blockchain venture funding raised in the second quarter of this year, jumping by 25% as other regions slumped, according to The Block Research.

And despite having less capital to hand, Dealroom data show that this year European venture firms are neck-and-neck with the U.S. in terms of the number of blockchain deals successfully completed.

The region’s web3 native venture firms have been gaining ground too. Late last year, Greenfield One closed a $160 million crypto fund with Dutch firm Maven 11’s $120 million fund following suit.

In April, The Block reported that Fabric Ventures is set to close two web3 funds worth $245 million. And last month, Fasanara Capital, a London-based investment firm that launched a liquid digital asset fund in 2019, closed a $350 million fintech and crypto VC fund.

The advances have come even as Europe’s limited partners — as the backers of venture firms are known — have stuck with their notoriously cautious approach.

“We talk to family offices and investors [in Europe] and rarely do they have private equity or VC in their portfolio — let alone crypto,” says Nicolas Priem, managing director of Tioga Capital, a Brussels-based web3 venture capital firm that launched its first $70 million fund in December