Framework Ventures raises $400 million in FVIII to invest in early-stage Web3, DeFi, and crypto gaming projects.
Framework Ventures is one of the earliest venture firms to enter the DeFi space. With the closing of its third fund, Framework now manages approximately $1.4 billion in assets, making it one of the largest venture investment firms in the blockchain industry. 90% of Framework’s managed assets are from a small set of institutional stakeholders.
Framework, together with its affiliate Framework Labs, consists of a team of technologists, researchers and investors who buy assets of, who build for, and who participate in open crypto networks. At its core, Framework is a technology company, building products and services to support the open blockchain networks that they invest in. The firm has backed dozens of companies in DeFi and Web3 spaces.
Led by Co-Founders Michael Anderson (ex Snapchat) and Vance Spencer (ex Netflix), Framework is most popularly known for being one of the first venture firms to go “all in on DeFi” in 2019, when the entire sector was reportedly less than a billion dollars in size.
As the DeFi market grew, the investment firm rose to prominence as one of the first and largest investors in a number of now multi-billion-dollar protocols, including oracle leader Chainlink, loan behemoth Aave, indexing protocol The Graph, and liquidity network Tokemak, among others.
Framework has rapidly expanded beyond DeFi into emerging segments such as social crypto and blockchain gaming, investing in the widely used web3 tool Zapper and the multi-billion dollar blockchain game Illuvium, among others.
Framework Ventures Co-Founder Vance Spencer, said:
“We believe we have pioneered a new style of crypto investing, and we have and intend to deploy it aggressively across other major verticals in the blockchain industry. Founders understand our cultural influence in the space because our affiliate, Framework Labs, has spent the last three years building alongside them, running nodes, participating in on-chain governance, building tools, staking and more. As a result, we believe we’re well-positioned to outperform our competitors, including the Sand Hill set that is only now coming into crypto and web3. Each new technology asset class creates new VCs that help upend the status quo, and Framework is one of them.”
Launched in 2019 and expanded in 2020 with an $8 million raise, Framework Labs was created as part of the Framework team’s thesis on “network capital”; the idea that crypto investing requires VC firms to actively participate on-chain to help protocols achieve their goals, foster their communities, decentralize and thrive.
For example, Framework Labs runs one of the largest indexer nodes on The Graph, as well as a Chainlink node that services 201 different price feeds in use by a multitude of apps across multiple chains. Framework Labs is active in various on-chain functions and is a prolific user of DeFi services today.
To continue challenging more traditional firms and providing portfolio companies with first class crypto-native service offerings, Framework and Framework Labs have expanded in recent months, with the teams crossing 22 people in the aggregate. New hires include Operating Partner Daniel Mason (formerly Spring Labs), Communications Partner Adam Badrawi (formerly Chainlink Labs), as well as venture investors Rajiv Patel-O’Connor (formerly Coinbase), Brandon Potts, and Joe Coll.
The venture firm will locate 50% of the new fund for investments in the burgeoning blockchain gaming space.
Framework’s investor team has identified blockchain gaming as a potentially significant growth area over the next five years, and as such has already committed heavily to different segments of this sector, leading early rounds in Stardust, a noteworthy gaming infrastructure project, and Illuvium, a $6 billion project that appears poised to be the blockchain industry’s first Triple-A game. By earmarking approximately $200 million of FVIII towards blockchain gaming, Framework is reinforcing its commitment to this emerging space.
Framework Ventures Co-Founder Michael Anderson, said:
“We think this is really the end of the beginning for crypto, and consumer-ready experiences such as gaming are ready to open the floodgates in terms of new users. I believe the next stage of the blockchain industry will be entirely about onboarding new users, and we think gaming is by far the biggest top-of-funnel opportunity. As the economics of play to earn models converge with triple-A games that are actually fun to play, we expect an explosion of growth for this sector. Over the next few years, we predict that blockchain gaming will become one of the largest forms of employment in the world, with billions of people attracted to the allure and access of better economic opportunities found in entirely new digital universes”.
Framework ventures, as a protocol investor, lays a strong focus on community ownership, aiming for only 4-6 percent ownership of a token’s supply and thereby leaving the protocol in the hands of its users.
Framework’s investment strategy is to invest over a ten-year time horizon, and the firm’s funds are organized similarly to typical venture capital funds. In addition, the firm employs a low-quantity, high-conviction strategy to investing, and has led over 80% of the significant investment rounds in which it participates in the past.
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