SparkLabs gets in on blockchain frenzy with $100m VC and cryptocurrency fund

SparkChain managing partner Joyce Kim. Photo credit: Joyce Kim.

Global venture capital and accelerator network SparkLabs Global Ventures announced its latest initiative today: SparkChain Capital, a US$100 million fund aimed at tapping the craze for all things cryptocurrency-related.

The new fund has a dual purpose. The majority of the capital will be used to make equity investments in promising startups in the blockchain space. The remainder will be used to buy cryptocurrency, including digital tokens issued by companies as part of their initial coin offerings (ICOs).

It is also planning to run its own ICO later in the year.

SparkChain is headed up by Joyce Kim, a co-founder and former director at Stellar – the San Francisco-based non-profit that just teamed up with IBM and a number of major banks to launch a global blockchain platform for rapid cross-border transactions.

Photo credit: Namecoin.

Kim tells Tech in Asia that the fund will primarily target participation in series A rounds, with each investment in the range of US$1 million to US$3 million. The aim is to invest in around 15 to 20 companies in total, with some funds earmarked for follow-on investments in those same startups.

According to a press release, SparkChain will additionally have “a small targeted holding of actual cryptocurrencies,” which it “will not actively trade.”

“We are presently capping our investments into cryptocurrency and ICO holdings at 10 percent of initial fund capital,” says Kim. “We will be able to invest in ICOs as well, but as expected, potential ICO investments will go through a very rigorous vetting process.” Investment decisions relating to cryptocurrency and digital tokens will be made by evaluating numerous factors and keeping a close eye on the overall state of the market, she adds.  

The ICO market is very exciting, but we think it is still too young and volatile to be dedicating a larger portion of assets.

As to why SparkChain will not engage in trading these cryptocurrency holdings,  Kim explains that this is not a focus for the fund at present. “There are many crypto hedge fund options for investors out there, and this isn’t our team’s strength,” she says. “We’re experienced in helping companies grow and make an impact in the world.”