Welcome again to Chain Reaction, a podcast that unpacks and dives deep into the newest traits, drama and information in crypto with a few of the largest names within the business to break issues down block by block for the crypto curious.
For this week’s episode, Jacquelyn interviewed Maria Shen, a common companion on the funding staff at Electric Capital, an early-stage enterprise agency targeted on crypto, blockchain, fintech and marketplaces.
Before Electric Capital, Shen was the CTO and co-founder of Bambify, which helped small to medium-sized companies create extra environment friendly provide chains with producers globally. Prior to that, she labored at Microsoft.
In March 2022, the agency introduced that it closed $1 billion for a pair of crypto funds: a $400 million car for making fairness investments in startups, and a $600 million fund meant to make investments immediately in crypto tokens. Its web site at the moment showcases a portfolio with about 75 investments with crypto startups, together with Magic Eden, ConsenSys and Bitwise, to identify a couple of.
Earlier this 12 months, Electric Capital put out a report indicating that the variety of blockchain builders within the U.S. has declined yearly since 2017, dropping to 29% final 12 months from 40% in 2017. We dove into what that report actually means and the way it will have an effect on the expansion of builders domestically and internationally.
“A lot of founders have already moved out of the United States or are looking to move out of the United States,” Shen mentioned. “That also means when we’re looking at investing we are increasingly looking outside the United States for opportunities and interesting founders.”
We additionally mentioned what crypto sectors she’s anticipating investments, why she’s betting massive on NFTs and the overall enterprise capital market sentiment amid a shaky crypto market. She thinks the continuing bear market is “going to last a while and is going to be increasingly difficult for companies to fundraise.”
As for VCs, the macro atmosphere has “shifted so much” and companies “are raising less capital and deploying less capital. A lot of firms are almost at the end of their fund lifetimes.”
Overall, Shen mentioned the crypto fundraising atmosphere will most likely develop into worse going into subsequent 12 months. But on a constructive observe, she sees the present bear market in a greater mild compared to the previous one in 2018 when “prices were falling off a cliff.” This market cycle feels “completely different,” she mentioned. “A lot of the things we were really dreaming about and talking about theoretically have been shipped now.”
Today, the crypto ecosystem has Ethereum-focused scaling options, extra stablecoin choices, decentralized finance, onchain governance and NFTs, Shen famous. “These things didn’t exist in 2018, 2019, so it’s interesting to see the market maturing beyond transmitting tokens or money to one another.”
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