Hack VC’s crypto Fund Reaches Impressive Milestone
Prominent crypto fund Hack VC has achieved a significant milestone by raising $77 million for its third fund, coming close to reaching its target of $80 million. This success has surpassed initial expectations and has resulted in the fund now being considered “oversubscribed,” according to reports from Fortune, which referenced filings with the Securities and Exchange Commission (SEC), internal documents, and sources familiar with the situation.
Established by blockchain experts Alex Pack and Ed Roman, Hack VC is concentrating its latest fund on seed-stage investments. The fund's performance indicates a positive trajectory for the firm's investment strategy.
Hack VC’s Latest Fund Performance Highlights
The third fund's deployment of capital began in 2023 and has already shown impressive early returns. Documents shared with investors indicate a net return of 1.7 times the initial capital invested, benefiting from recent positive movements in the crypto market.
In 2021, Hack VC launched its first fund, which closed with $206 million in commitments, laying the foundation for its subsequent successes in the crypto investment landscape.
However, the journey for Hack VC has not been without challenges, as the early stages of the fund's investments saw a return of 90% of the capital invested, resulting in a slight overall loss initially. Despite this setback, the firm pushed forward and managed to raise a $150 million second fund in 2022, focusing on later-stage companies and token investments.
The second fund yielded a net return of 150%, showcasing notable wins in projects such as io.net, a decentralized cloud computing network, and Elixir, a liquidity network tailored for crypto exchanges.
The Long-Term Vision of Hack VC
In a recent interview, Alex Pack emphasized that the current phase of the crypto industry resembles the internet's landscape in the mid-90s, highlighting the substantial long-term potential for infrastructure investments. The firm's second fund has already deployed half of the committed capital, with current holdings valued at $150 million.
Despite initial expectations to raise a minimum of $100 million for the third fund, Hack VC has seen significant investor demand, surpassing its lower target of $80 million. By the end of August, the fund had already secured over $77 million across two vehicles, including a feeder fund for international investments.
Hack VC Among 2024’s Top crypto Fund Raises
Hack VC's successful raise for its third fund places it among the elite ranks of the largest crypto-focused venture capital raises in 2024. Noteworthy funds include ParaFi's $120 million raise and Lemniscap's $70 million fund.
Accolade, a blockchain fund of funds, recently secured $135 million across two vehicles, while Paradigm announced an $850 million fund, a decrease from its sizable $2.5 billion offering in 2021.
Despite the influx of new capital into the sector, the cryptocurrency market faces challenges, with regulatory uncertainty and slower-than-expected mainstream adoption impacting industry growth. Leading assets like bitcoin have experienced price stabilization following a brief rally earlier in the year, triggered by the U.S. SEC's approval of bitcoin and ethereum ETFs.
While market conditions remain dynamic, crypto startups managed to attract $2.7 billion in funding across 503 deals in the second quarter of 2024, showcasing resilience and continued interest from investors. Infrastructure startups, including standout performers like Monad, a parallelization Layer 1 platform that secured $225 million in Series A funding, have been at the forefront of funding trends.
