Dove Dispatch #14
The Emergence of Crypto Mafias
Hello world, and welcome to Dove Dispatch #14!
We recently published our H1 2021 Crypto Fundraising Report. Go check it out!
Today, we are digging into the emergence of crypto mafias. Popularized in the early 2000s, the term “Paypal Mafia” referred a group of former Paypal employees and founders who have since founded technology companies such as Tesla, LinkedIn, Palantir Technologies, SpaceX, Affirm, and others.
Crypto seems to be following the same course!
As we dug into the data, we were surprised by how large crypto mafias have become in capital markets.
78% of these ‘mafia’ fundraising rounds are from folks who spun out of CeFi and Infrastructure companies. This does not come as a surprise as they are some of the oldest ‘sectors in crypto’ and are the most likely to have alumni spinouts raising funds.
Unsurprisingly, two of the oldest crypto exchanges - Kraken and Coinbase - lead the charge.
43% of the funding deals completed by members of mafias have come out of leading Infrastructure companies and foundations. With 9 companies raising a round in 2021, ConsenSys keep showing how successful they are in inspiring entrepreneurs to spin out.
Some NFTs and Web3 companies have started to spin out entrepreneurial talent. With RabbitHole ($3.6M) and early other ventures being built by former employees, Dapper Labs should be getting a mafia of its own later this year.
To finish, Synthetix is the very first DeFi mafia we’ve seen emerge. DeFi mafias are growing quickly and should dominate in the coming years: 0x Labs (Phantom Wallet — $9M), MakerDAO (Sense Finance — $5.2M) are on track to become big producers of successful spinout DeFi projects receiving funds on the capital market.
Last week 19 projects announced fundraising rounds:
Violet Protocol ($3.5M) |A L2 identity protocol where individuals and institutions can maintain a legally compliant identity (KYC, AML, PEP, etc) and enrich it with other on- and off-chain data — with participation from BlueYard Capital, Inflection, Ethereal Ventures, Frontline Ventures, CMT Digital, Regan Bozman, Sina Habibian, Marvin Ammori, Fabio Berger, Ian Hogarth, Taavet Hinrikus, Sten Tamkivi, Molly Mackinlay, Juan Benet, and others.
Exactly Finance ($3M) | Building a decentralized credit protocol with stablecoins, fixed interest rates, and longer terms for Alice and Bob — with participation from Kaszek Ventures, 6th Man Ventures, BairesDAO, 11–11 DG partners, Newtopia VC, NXTP Ventures, Sur Ventures, Esteban Ordano, JP Thieriot, Ariel Barmat, Matias Woloski, and Marcos Galperin.
Dune Analytics ($8M) | Ethereum-centric analytics platform — with participation from Union Square Ventures, Redpoint, Dragonfly Capital, and Multicoin Capital.
TaxBit ($130M) | Cryptocurrency tax automation firm — with participation from Tiger Global Management, Sapphire Ventures, Paradigm, Institutional Venture Partners, Insight Partners, Anthony Pompliano, 9Yards Capital, and Madrona Venture Group.
Bitwave ($7.25M) | An accounting and tax solution for Digital Assets — with participation from Blockchain Capital, Nascent, Nima Capital, Rowan Trollope, Ar.ca, and XBTO Ventures.
NearPad ($2M) | A launchpad, DEX Aggregator, and Yield Aggregator all in one for the NEAR ecosystem — with participation from NGC Ventures, NEAR Foundation, OWC, Ellipti, LD Capital, Flow Ventures, Supernova Fund, ExNetwork Capital, Genblock Capital, and Arkn Ventures.
CHAMPtitles ($8.5M) | Helps insurance carriers, lenders, state governments, vehicle retailers, and OEMs digitally create, manage, and transfer vehicle titles — with participation from XBTO Ventures, A100x Ventures, Ally Ventures, Eos Venture Partners, Guidewire Software, Sadie Ventures, State Auto Insurance, Westerly Ventures, and W. R. Berkley.
Chekkit ($500k) | A DAG blockchain-powered anti-counterfeiting solution for food and drug supply chain tracking — with participation from Biola Alabi, Blockchain Founders Fund, Japan Strategic Capital, Launch Africa, and Rising Tide Africa.
Soldex AI ($1.5M) | A decentralized and non-custodial AI automated cryptocurrency exchange platform that trades in Solana — with participation from SinoGlobal Capital, Peech Capital, Alphabit Digital Currency Fund, Moonwhale Ventures, and Maven 11 Capital.
Blocktrade ($22M) | A digital asset trading facility, which aims to become fully regulated
Mudrex ($2.5M) | Building portfolio bundle using top-performing algorithms for different risk-reward profiles. An investor simply chooses a portfolio based on her risk-reward expectations — with participation from Nexus Venture Partners, Village Global, Kunal Shah, Anand Chandrasekaran, and Anjali Bansal.
Tally ($6M) | Easy-to-use governance dashboard — with participation from MetaCartel Ventures, Fire Eyes DAO, Ryan Adams, The LAO, Placeholder, Blockchain Capital, 1kx, Stani Kulechov, Collab+Currency, Robert Leshner , Larry Sukernik, Castle Island Ventures, Notation Capital, Dave Balter, Regan Bozman, Lemniscap, DeFi Alliance, Jai Bhavnani, BairesDAO, and others.
CoinDCX ($90M) | Indian company specialized in crypto-enabled financial services — with participation from B Capital, Coinbase Ventures, Jump Capital, Polychain Capital, and Block.One.
DeFiSafety ($1M) | Rating DeFi products on software quality and use of best practices — with participation from Andre Cronje, Leo Cheng, Griff Green, Corey Petty, Shahar Abrams, Jeff Issis, Pedar Muller, Jonathan Boateng, Wot_is_going_on, MetaCartel Ventures, Feleman, OWL Ventures, NetX Fund, Turn Capital, and Immunefi.
Liquality ($7M) | Multi-chain wallet with built-in swaps — with participation from Hashed, Galaxy Digital, White Star Capital, Accomplice, Coinbase Ventures, and Alameda Research.
FalconX ($210M) | A complete end-to-end institutional trading solution — with participation from Tiger Global Management, Sapphire Ventures, B Capital, American Express Ventures, Altimeter Capital, and Mirae Asset Global Investments.
Helium ($111M) | An Internet-of-Things developer platform for building the network and transferring IoT device data — with participation from Andreessen Horowitz, Ribbit Capital, 10T Fund, and Multicoin Capital.
Horizen Labs ($7M) | Providing the best blockchain building solutions for real-world use cases with privacy options, low transaction fees, and configurable revenue models — with participation from Digital Currency Group, Liberty City Ventures, Sound Ventures, Deribit, Artist Capital, Deus, and LionTree.
Pintu ($35M) | Leading Indonesian crypto exchange — with participation from Lightspeed Venture Partners, Alameda Research, Blockchain.com, Castle Island Ventures, Coinbase Ventures, Intudo Ventures, and Pantera Capital.
We have also added the following investors: Feleman, NetX Fund, Turn Capital, Mirae Asset Global Investments, Artist Capital, 11–11 DG partners, Newtopia VC, NXTP Ventures, Sur Ventures, Kid Venture Capital, and many angels.