UK investment trust marked down stakes in Animoca, Kraken and Paxos earlier this year

RIT Capital Partners Plc, a £3.6 billion ($4.6 billion) UK investment trust, marked down the value of investments in several high-profile crypto startups earlier this year.

The trust, founded by Jacob Rothschild, had invested tens of millions of pounds in crypto firms since 2021, in addition to backing numerous tech startups. Its 2021 annual report shows positions of £27.8 million, £33.2 million and £20.8 million in Animoca Brands, Kraken and Paxos, respectively. In accounts for the following year, published in February, those positions had shrunken to £14.2 million, £16.2 million and £16.2 million.

It is possible that part of RIT’s stakes were sold off, but unlikely given that the three startups in question are privately held.

In a note in the 2022 accounts, RIT chairman Sir James Leigh-Pemberton wrote, “Over 2020 and 2021 private investments added around 34% to total NAV... In 2022, the sharp correction in public markets, and in particular tech markets, has meant that we have written down a portion of these significant gains.”

He also wrote that RIT’s private investments are, “by design, multi-year investments, which we are not forced to sell to fund redemptions.”

RIT, Kraken and Paxos did not immediately respond to a request for comment. A spokesperson for Animoca Brands declined to comment.

The crypto startup selloff

The news comes amid a broad reset in how investors value crypto startups, and indeed tech startups in general, after a period of exuberant venture capital investing in 2021 and 2022.

Yesterday, London-based Molten Ventures Plc de-valued its stakes in Revolut, the fintech and crypto business, and crypto security firm Ledger by 40% and 22%, respectively. Revolut was valued at a gaudy $33 billion when it last raised money in mid-2021.

In March, The Block reported that shares in numerous private crypto startups were being hawked at sizable discounts on Birel.io, a platform that specializes in secondary market transactions. Those startups included Alchemy, Blockchain.com, Chainalysis, Kraken, ConsenSys, Blockdaemon, CoinDCX and OpenSea. The discounts on offer were as high as 74% in some instances.