10T Holdings, the crypto investment firm helmed by hedge fund titan Dan Tapiero since early 2021, won't do any further fundraising as his attention turns to new crypto private equity venture 1RoundTable (1RT) Partners.
"10T has three funds and there will not be any more new 10T funds," Tapiero said in an interview, confirming the launch of 1RT. He said the new venture ultimately represents the evolution of 10T Holdings.
"When 10T was launched, it was really an aggregating business, I wanted to own some of the private companies in the space, it was really just for me personally and then a handful of my friends and network," Tapiero said. "And the fund grew dramatically and I had never anticipated at inception that we would today be building an operation to help shepherd our companies to go public. So I really wanted that rebrand."
Blockworks first reported this week that Tapiero is seeking to raise $1 billion for 1RT's flagship fund by the end of the third quarter of this year.
Tapiero will remain the CEO, CIO and managing partner of 10T, overseeing its $1.2 billion asset under management and its 27 investments — which include Kraken, Ledger and Gemini — across the existing three funds. He will take on a similar role at 1RT alongside many of his colleagues who will have parallel roles at both 1RT and 10T, according to funding documents seen by The Block.
There will also be some new faces at 1RT to bring operational experience to support portfolio companies as they mature. These include Tad Smith, the former CEO of auction house Sothebys, as an advisory partner, and Joe Majocha, the former chief financial officer of Two Sigma's private investments fund, as CFO, the documents said.
"Last summer I looked at our portfolio and I thought to myself these companies will need guidance and will need to be shepherded to the next stage towards IPO or realizations," Tapiero said. "And I didn't really see any firms out there that were doing that. The traditional firms — Goldman and Morgan Stanley — are not really involved with crypto businesses."
Crypto IPOs in 2024?
The U.S. IPO market was “virtually closed in 2022 due to higher volatility and falling valuation multiples,” according to data from PWC. Several crypto companies have tried to list via SPAC and have either faced the bite of the crypto bear market or increased regulatory scrutiny. A recent Wall Street Journal report said that the SEC reviewed the going-public filings of Bullish, Circle and eToro for nearly a year or more and still didn’t declare them “effective.”
Yet Tapiero remains optimistic on the prospects of crypto companies listing on exchanges, whether it be in the U.S. or abroad.
"The second half of 2024 and 2025 is probably a good time," Tapiero said. "I think you'll see some of these crypto businesses go public at that time."
"It doesn't have to necessarily only be on the Nasdaq, there are many exchanges in the world," he added. Around 65% of 10T's portfolio is based outside the U.S.
Circle's Chief Financial Officer Jeremy Fox-Geen told the Wall Street Journal this week that the stablecoin issuer still intends to go public, though likely not this year as the firm waits for better market conditions. Meanwhile Kraken, one of 10T's portfolio companies, continues to bolster its C-suite with seasoned executives who are experienced in public offerings.
Outperforming on the downside
Tapiero's 10T managed to stay above water amid the turbulence of last year. The 10T funds steer clear of token investments, instead targeting equity investments in mid-to-late-stage crypto companies.
"We may underperform on the upside," said Tapiero at the Token2049 conference London last year. "But we are outperforming on the downside."
Tapiero's first 10T fund is already 94% allocated and has a 1.27 gross multiple of invested capital since inception, according to the funding documents. Its bets include Ledn, Huobi and eToro.
1RT's flagship fund will have a five-year investment period and 10-year fund term, the documents said. The investment opportunities will be split roughly between three categories: new era digital asset ecosystems, digital asset ecosystems infrastructure and the metaverse category, which includes NFTs focused companies.
This story has been updated to clarify Joe Majocha's role at 1RT and TwoSigma.
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