Tioga Capital, a leading European venture capital fund focusing on blockchain technology, has tripled its assets under management to EUR42 million.
Buoyed by commitments from multiple sovereign wealth funds and Europe’s largest endowment, Tioga Capital’s growth clearly highlights how institutional investors are moving into blockchain. Recent months have also seen Tioga Capital make initial investments in five blockchain infrastructure start-ups.
Tioga Capital, one of Europe’s leading venture capital funds focusing on blockchain technology, has added more than EUR25 million to its assets under management (AuM) – more than tripling its AuM to EUR42 million after its initial EUR14 million close.
As blockchain continues to gain traction and legitimacy, sovereign wealth funds (SWFs) are increasingly moving into the technology. Both the Flemish (PMV) and Brussels (SRIB) sovereign wealth funds committed to Tioga Capital in 2021, following an earlier commitment by the Walloon SWF (SRIW) in 2020. SRIW’s commitment marked the first time a European sovereign wealth fund invested directly in blockchain.
With its third close, Tioga Capital has added another first to its roster of investors. The KU Leuven endowment, the largest in continental Europe, has confirmed its commitment to the blockchain-focused fund. According to Tioga Capital, moves by SWFs and endowments into the blockchain space are confirmation that investors increasingly view it as a promising technology. Internationally, blockchain is attracting growing attention, with macro investors (such as Paul Tudor Jones), pension funds, endowments (such as Harvard and MIT), and corporations (Tesla, etc.) increasingly investing in the industry.
“Blockchain is nearing a tipping point,” says Patrick Van de Mosselaer, partner at Tioga Capital. “As a venture capital fund, we’re excited to invest in blockchain in its early stages and see the technology reach its full potential. Now we’re also seeing institutional investors – including sovereign wealth funds and endowments – make the jump to the technology. Today, only one or two percent of people have personally been in contact with blockchain, but we expect this share to rise dramatically in the coming years as the technology becomes mainstream.”
Recent months have also seen Tioga Capital make its first five investments. The fund has invested in several notable blockchain companies, including blockchain infrastructure start-up Venly (NFT), Nym (privacy), Scorechain (KYC/AML compliance), Europe’s leading crypto tax company Blockpit, and the world’s leading bitcoin self-custody start-up Casa. At this stage, Tioga Capital is focusing mainly on start-ups that contribute to blockchain infrastructure as well as on open finance.
“In its early days, blockchain had a bit of a negative reputation. It was perceived as high-risk and due to the lack of regulatory clarity, transactions were often handled offshore. We have deliberately decided to structure all of our funds as onshore products with all the bells and whistles to deliver total clarity and comfort for investors who do not yet have any exposure to crypto. This entails additional scrutiny and efforts in terms of fund formation on our end, but the participation of several SWFs and an endowment in our fund shows this is worthwhile,” says Nicolas Priem, partner at Tioga Capital.
“One of the areas that is incredibly exciting in crypto today is the opportunity to build a decentralised, open and permissionless financial universe with no need for a middleman. Many people dismissed crypto early on because no cash flows were generated. Today, that picture has changed dramatically. Protocols like Uniswap generate over USD900M in revenue fees/year on USD50 billion of monthly volume. Young ambitious entrepreneurs seeing this will be drawn to crypto. The inflow of talent combined with a cultural shift to more financial savviness makes us believe that a decentralised form of finance is here to stay,” concludes Michiel Lescrauwaet, partner at Tioga Capital.