VanEck has launched a new Venture Fund to diversify its portfolio.
The $30-million fund is aimed at early-stage companies with the aim of funding fintech projects that combine cryptography and AI.
“Those two components are very much like horizontal technologies. And I say that because crypto is like the value layer and AI is where you can now take financial services that are typically performed by people, represent them in code and start to automate things,” general partner Wyatt Lonergan told Blockworks.
VanEck’s fund has already made two investments. However, VanEck doesn’t want to share any more details. We do know that the fund plans to invest up to $35 million, with checks ranging from $500 to $1,000,000.
Lonergan is focusing on the early stages (pre-seed, seed), although he’s open to participating in Series A projects if they come along.
“We need to be opportunistic. If we see something that we missed because we weren’t around a year ago, they’re raising enough ground and it’s attractive — we’ll look at it. But we are always price-sensitive. When you have a small fund, you have a concentrated fund structure, the idea is that any one investment could return the fund multiple times. That’s very important,” He said.
Lonergan, like his business partner Juan Lopez, came out of Circle Ventures. In 2021, he helped to launch Circle Ventures before moving on to VanEck.
It’s not surprising that the fund has an interest in stablecoins given Lonergan and VanEck. The firm does not have its own stablecoin but it has invested in Agora which is run by Nick van Eck who is the son of VanEck’s CEO Jan van Eck.
Lonergan’s 69-year old investment firm and his personal interest are not the only things that make them tick.
You can also find out more about the “core,” Lonergan says “are stablecoins and…within that, we kind of believe the underlying blockchains are more or less being commoditized to a point that there’s enough great technology out there. That’s best exemplified by [the fact that] you can go onto any crypto wallet or Coinbase today and upload dollars for free, send it across the world.”
Lonergan believes that regulatory clarity for stablecoins could be achieved in the next two to three years. He explained that now was the time to lay the foundations of startups who could thrive in an environment with a favorable regulatory climate.
Lonergan argued that stablecoins will not be an obvious use of crypto for fintechs. Stablecoin adopters may not be aware of the crypto connection.
“It won’t be this crypto thing. If you’re not investing in this category, [and] it could be a weird tagline, but I think it could be that kind of ChatGPT moment for crypto, because [stablecoins] are the one technology that businesses will consume at scale, right? AI was not apparent until you had Chat,” Lonergan stated.
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