Northzone announced €1 billion Web3 investment to support Web3 startups. This is another step from the UK to expand the Web3 sector.
Web3 is touted as the combination of blockchain and decentralized technology and aims to revolutionize the world. As a result, many corporations and business firms have come forward to elevate Web3 further. Today, London-based venture capital firm Northzone has announced its €1 billion investment in crypto and fintech startups.
Web3 Move From Northzone
VC firm Northzone has come forward to expand the Web3 sector further by announcing a €1 billion fund for Web3 startups. Wendy Xiao Schadeck, a partner at Northzone, claimed that Web3 is the core sector for the firm. She also promoted the firm’s Web3 plans by publishing a crypto investment thesis in July 2018, a way back from the start of crypto winter.
Northzone was founded in 1996 as a generalist investment firm, which has partnered with a wide range of tech companies, like open banking specialist TrueLayer, and Buy now Play later giant Klarna, to popular music streaming platform Spotify, which is continuously exploring Web3 to make its dominance. In addition, Northzone now counts startups in the crypto industry like Magic Labs, DeFi protocol Gro, and Web3 privacy firm Sunscreen as an excellent portfolio company.
Wendy Xiao Schadeck said, “Web3 and Web2 two will likely start to converge in this fund cycle’s lifetime.” For instance, some of the Web2 fintech companies in our last fund have launched tokens, and some of our gaming companies have decided to base their follow-on rounds from Web3 VCs — so it’s really hard to say exactly where the delineation will be.”
Strategies To Expand Web3
Northzone has built the infrastructure to support Web3 startups through both equity investments and token sales, and the firm has also previously participated in staking tokens. Xiao Schadeck also confirmed that the firm would be open to supporting decentralized autonomous organizations (DAO) by investing at the right time. Northzone currently does not have any NFTs, unlike a London-based venture firm Blossom Capital, which has recently ventured into NFTs by purchasing a Bored Ape, a CryptoPunk, and an Azuki. Blossom Capital also founded its partner Ophelia Brown via its $432 million fund.
Regarding NFT purchasing, Xiao Schadeck said, “We consider new modes of investing that are aligned to what we do. But it’s not at a point where we say we’ll dedicate a portion of the funding to buy NFTs or anything like that. So far, we haven’t found that specifically, NFTs themselves are an investment case that fits our venture criteria.”
Northzone has not dropped their Web3 plans due to the crypto winter and bumps in the road DeFi has faced. Portfolio company Gro was slammed by Terra’s UST crash in May, leading to a search for another strategy and a way to generate yield for users. Like Gro, Northzone will look for opportunities and innovations to bring to the Web3 industry.
The firm will soon participate in trading liquid tokens as Xiao Schadeck said, “We would discuss and evaluate with our LPs to see if the time is right for that. I think what’s most likely to happen is that we’ll continue to invest into Web3 companies out of our core funds and if they decide to launch tokens we’ll hold them — we’re not at all limited in that way.”
Northzone’s move comes after other European venture capital firms such as Aglaé Ventures and Cherry Ventures recently launched a crypto fund to support Web3 movements in the cryptocurrency industry. Northzone’s fund will help startups to dominate the Web3 sector quickly.
