March 5, 2024

Lightspeed Faction launches $285M startup fund for crypto projects

The crypto-oriented venture capital firm announced a fund that will invest in Seed and Series A rounds for promising blockchain projects.

Venture capital firm Lightspeed Faction has created a $285 million fund for crypto startups, according to a Nov. 9 announcement. The fund will focus on “early stage blockchain projects” and will also provide capital as these projects scale, the announcement stated.

Lightspeed Faction said it can provide founders access to “a team of experienced blockchain investors and operators,” including members of the Amber Group, Blockchain.com, and Coinbase teams. The firm is a joint venture between the more traditional tech-oriented fund Lightspeed Venture Partners and the crypto-only fund, Faction. It attempts to combine the expertise of both organizations in order to maximize success.

Lightspeed Faction co-founder Banafsheh Fathieh claimed that the $285 million fund is needed for the many promising blockchain projects that are sprouting up each day, stating:

“[C]rypto is a generation-defining technology, and we are fully committed to investing behind the best entrepreneurs looking to propel blockchain technology forward. The blockchain ecosystem is full of promising projects looking to disrupt everything from financial systems to telecommunication.”

Related: Crypto VC firm Spartan Capital invests in Pendle to drive DeFi growth

In the announcement, Lightspeed Faction claimed that it funded several blockchain startups during the bear market that turned out to be successes, including Crossmint, Lens, Narya.ai, Skip.money, Matter Labs, and others. It generally gets involved during seed and Series A rounds.

Crypto venture capital funding fell to a three-year low in the third quarter of 2023, with many funds seemingly being scared away by low crypto prices and a lack of media attention compared to the bull market of 2021. However, some projects have still managed to achieve multi-million dollar raises even with these lower levels of funding.