Dove Dispatch #25 (Haseeb Qureshi - Dragonfly Capital)
Fund of funds, Layer 2, cross-border identity, multi-stage investing, and much more
GM and welcome to Dove Dispatch #25!
We recently published our Q3 2021 Crypto Fundraising Report. Go check it out!
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Haseeb Qureshi joined Dragonfly Capital in 2019. After a $100M inaugural vehicle announced in 2018, they recently raised a $200M fund. They recently bet on SIPHER, Animoca Brands, Aurora, and DeHorizon. Dragonfly Capital is also an early investor in 1inch, ARCx, Anchor, Celo, Dune Analytics, and many other successful projects.
Haseeb sat down with us and shared his thoughts on investing.
Dragonfly invested in Folius Ventures, MapleLeafCap's newly announced venture fund. Crypto FoFs are particularly effective from a diversification and returns perspective but are still an under-discussed topic. How strategic is the FoF investment strategy for Dragonfly?
Investing in funds is great because it allows us to get closer to emerging managers with fresh perspectives on the next generation of crypto. We're somewhat opportunistic with it since most of our investments are directly into protocols and companies. But when we come across a promising new manager with a differentiated strategy, we love to find ways to partner with them.
Dragonfly announced a $200M new fund in December 2020 - how has this amount of fresh capital changed your internal strategy in 2021?
Our larger funds allow us to be more aggressive in backing the most innovative projects across multiple stages. We got our start backing projects in the earliest stage, generally seed or pre-seed, but thanks to our fund size, we're able to partner with projects in later stages as well. For many of our early investments, like Avalanche, Bybit, or Ribbon Finance, we've continued investing in and supporting entrepreneurs across multiple stages even after they become multi-billion dollar behemoths.
You published a brilliant essay in July about rollups and Ethereum scaling solutions - what is Dragonfly’s strategy to get exposure to Layer 2?
We are early investors in Matter Labs (the creators of Zk Sync), and we believe ultimately that ZK Rollups are going to be the long-term solution on L2 for scaling smart contracts. While optimistic rollups are easier to get off the ground, in the long-term the potential for cryptography-powered solutions is so much larger. I think in 3 years’ time, we'll find more and more of the crypto economy is powered by ZK tech.
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Dragonfly invested in Komorebi Collective - a venture DAO that invests in women-led blockchain projects structured as an SPV LLC under Syndicate Protocol. How do you see investment DAOs evolve over the next few years?
Investment DAOs are fascinating because they are the perfect encapsulation of what makes DAOs work: a collective of people aligned by economics, all pulling in the same direction, no matter where they are in the world. And with more opportunities being crypto-native, to begin with, DAOs are the natural tool for coordination. I think there are only going to be more and more such DAOs to enable global coordination around particular themes, which is also why we're investing into many of the tools that power DAOs on the backend.
Dragonfly has a strong cross-border identity by operating from China and the US - what are the main differences between both countries’ fundraising ecosystems?
With the recent crypto trading ban, China has obviously become a less friendly country to crypto trading. But that doesn't diminish the vim and enthusiasm of Chinese-born entrepreneurs, who are largely relocating to Singapore now. Singapore has really become the new financial and innovation center of Asia due to its favorable and forward-thinking regulation, similar to how Switzerland embraced crypto a few years ago. We've started to build more of a presence in Singapore and expect it to be the center of Asian crypto for the next decade.
Between the two ecosystems, Asia tends to be stronger on CeFi and has more aggressive operators, but the West tends to have more of the dominant protocol development and more core tech innovation. But the gap is narrowing over time, and I expect within the next decade we'll see that gap close entirely, as more and more teams become truly global.
We've seen seed investments go from a few people with an idea, to becoming a top 5 exchange or a top 15 cryptoasset. With that experience and with the relationships we've built (with DeFi protocols, exchanges, L1s, and with the technologists who are building it all), we're able to provide a lot of support and connectivity for projects at every stage of development.
Many thanks to Haseeb for sharing such insightful insights.
Last week 32 projects announced fundraising rounds:
Koi Metaverse ($2.6M) | The digital collectibles platform for virtual GameFi NFTs — with participation from AU21 Capital, Titans Ventures, ZBS Capital, X21 Digital, Maven Capital, Encrypt Club, Kyros Ventures, and ExNetwork Capital.
Enjinstarter ($5M) | A blockchain gaming launchpad focused on growing the Enjin ecosystem and the metaverse — with participation from "Witek Radomski, Baselayer Capital, Momentum 6, ArkStream Capital, AU21 Capital, Aussie Capital, Angleone Capital, Avalon Wealth Club, Boost Innovation Labs, Brotherhood, Basics Capital, Chainstride Capital, CryptoDormFund, CSP DAO, Dutch Crypto Investors, ExNetwork Capital, Follow[the]Seed, HG Ventures, Hello Capital, It’s Blockchain, Kangaroo Capital, Moonwhale Ventures, OIG Investment Group, Otis Capital, TAG Ventures, Three M Capital, TK Ventures, Starter Capital, SkyBridge 20 Ventures, Vendetta Capital, 6K Starter, 0x Ventures, Shitij Gupta, Shashwat Gupta, and AngelONE Capital.
Ardana ($10M) | Decentralized stablecoin ecosystem of Cardano — with participation from Mechanism Capital, Kronos Research, Mgnr, Morningstar Ventures, Three Arrows Capital, cFund, Ascensive Assets, David Post, Taiyang Zhang, Justin Sun, Skynet Trading, Portico, Selini Capital, FMFW, and Kosmos Ventures.
CoinRoutes ($15M) | A crypto trading software provider — with participation from Ayon.
Beta Finance ($5.8M) | The permissionless money market to lend, borrow, and short crypto assets — with participation from Spartan Group, Sequoia Capital, ParaFi Capital, Multicoin Capital, GSR Ventures, Delphi Digital, and DeFiance Capital.
ArenaX Labs ($5M) | An Ethereum native game (dApp) where players all over the world can purchase, train, and battle characters powered by real artificial intelligence — with participation from Paradigm, and Framework Ventures.
Alchemy ($250M) | The leading blockchain developer platform — with participation from Andreessen Horowitz, Lightspeed Venture Partners, Redpoint, Coatue Management, Addition, DFJ, and Pantera Capital.
Elementus ($12M) | The first universal blockchain search engine and institutional-grade crypto forensic solution — with participation from Velvet Sea, Alameda Research, BlockFi, Pomp Investments, Lightspeed Venture Partners, Gemini, Blockchain.com, and Avon Ventures.
Nameless ($15M) | Empowering brands and enterprises to launch and fully manage their own custom NFT projects — with participation from Mechanism Capital, Velvet Sea, Red Beard Ventures, Delphi Digital, Sound Ventures, VaynerFund, Spartan Group, Outlier Ventures, The LAO, Fenbushi Capital, Dez Bryant, Guy Oseary, Marc Benioff, Third Prime, Shaun Neff, Michael Rubin, Mark Cuban, Cultur3 Capital, D64 Ventures, FlamingoDAO, Wursta Ventures, and Michael Rapino.
Voyager Digital ($75M) | A crypto-asset broker that provides retail and institutional investors with a turnkey solution — with participation from Alameda Research.
Squads ($1.5M) | A user-friendly DAO generator on Solana, which combines a treasury, on-chain voting, and a chat all in one interface — with participation from Collab+Currency, Reciprocal Ventures, Volt Capital, 6th Man Ventures, Republic, 8186 Capital, Solana Capital, Chaotic Ventures, Ryon Nixon, Ryan Selkis, Julia Lipton, Chris Hermida, and Manna Research.
Hawku ($4M) | Creating the premier marketplace for utility and gaming NFTs — with participation from Lightspeed Venture Partners, Dragonfly Capital, Multicoin Capital, Alameda Research, Animoca Brands, Solana Capital, Virtual Human Studio, and ei ventures.
MomentRanks ($4.2M) | The premier NFT resource platform, offering analytics and tracking tools for NBA Top Shot collectors — with participation from Coinbase Ventures, Acrylic, Lattice Capital, A.capital, Permit Ventures, Boston Seed Capital, and Maveron.
ClubNFT ($3M) | Making it easier to discover, protect, and share NFTs — with participation from Galaxy Digital, Galaxy Interactive, CMT Digital, Draper Dragon, Richard Entrup, Red Swan Ventures, and Sfermion.
Skylaunch ($1.4M) | Multi-chain IDO platform that goes beyond the initial capital raise by connecting new projects with the tools, finance & support network — with participation from Synergia, Marshland Capital, 18.ventures, Magnus Capital, GSR, ZBS Capital, X21 Digital, Nabais Capital, AU21 Capital, and Waterdrip Capital.
Moralis ($13.4M) | Scalable, fast and robust web3 infrastructure — with participation from EQT Ventures.
Ex Populus ($3M) | A commercial partnership with select developers covering the developer's publishing related operations and expenses — with participation from Animoca Brands, CMS Holdings, Decision Tree Capital, Enjin, Evernew Capital, Infinity Ventures Crypto, Outlier Ventures, Polybius Capital, and Zipmex.
Drip Capital ($40M) | Offering trade financing product targeted towards SMEs in developing markets. Its automated risk assessment model allows rapidly growing SMEs quick and easy access to finance — with participation from Sequoia Capital, Wing VC, TI Platform Management, Accel, and GC1 Ventures.
Osmosis ($21M) | The cosmos automated market maker (AMM) protocol — with participation from Paradigm, Robot Ventures, Nascent, Ethereal Ventures, Figment Capital, and Do Kwon.
QuickNode ($35M) | The blockchain infrastructure platform for companies — with participation from Tiger Global Management, Seven Seven Six, Soma Capital, Arrington XRP Capital, Anthony Pompliano, and Crossbeam.
Tulip ($5M) | Solana's yield aggregation homestead — with participation from Jump Capital, Alameda Research, Amber Group, Cadenza Ventures, Fisher8 Capital, CMS Holdings, Rarestone Capital, FinTech Collective, DV Chain, Darren Lau, Orthogonal Trading, Cindy Leow, Zoomerjd, and Noah Dummett.
Friends With Benefits ($10M) | The ultimate cultural membership powered by a community of our favorite Web3 artists, operators and thinkers bound together by shared values and shared incentives — with participation from Andreessen Horowitz, Pace Capital, Kindred Ventures, Spark Capital, and Li Jin.
Drift Protocol ($3.8M) | A lightning-fast and scalable perpetual futures DEX — with participation from Multicoin Capital, Jump Capital, LedgerPrime, Robot Ventures, Alameda Research, QCP Capital, Not3Lau Capital, and ROK Capital.
Hyype ($2M) | A social network that will allow owners of NFTs to connect stories to the items in their collection — with participation from Electric Capital, Elevation Capital, Santiago R. Santos, Cuy Sheffield, Deepak Menon, Farid Ahsan, Meltem Demirors, Beaniemaxi, Kenneth Ng, Alex Svanevik, Matt Kalish, Trent Elmore, Maria Paula Fernandez, Calvin Spears, Will Price, Mariano Conti , Evan Silverstein, Chris Hutchison, Andy Chorlian, David Hoffman, Ryan Adams, Zak Cole, Zach Bruch, and Chris Hermida.
KYVE ($2.8M) | A next-generation protocol that enables data providers to seamlessly store and reliably verify their data streams — with participation from Permanent Ventures, Hypersphere Ventures, Volt Capital, Mechanism Capital, Coinbase Ventures, Distributed Global, 4SV, Compute Ventures, Zee Prime Capital, CMS Holdings, Ternary Capital, Flori Ventures, Mina Foundation, Octopus Network, Composable Finance, Justin Kan, Robin Chan, Santiago R. Santos, John Scianna, Moonbeam Foundation, Ganesh Swami, Erik Ashdown, and Alex Shevchenko.
CoinList ($100M) | The trusted platform for new crypto offerings — with participation from Accomplice, Agman Partners, Hashkey Capital, Access Ventures, Alphemy Capital, Broadhaven Capital Partners, Continue Capital, CMT Digital, DFG, FBG Capital, Fenbushi Capital, Hack VC, Jsquare, LD Capital, Metaplanet Holdings, Perpetual Value Partners, Rising Tide, Sten Tamkivi, Taavet Hinrikus, and GoldenTree Asset Management.
SIPHER ($6.8M) | A 3D live-action RPG, PvE, & PvP Blockchain Game — with participation from Arrington XRP Capital, Konvoy Ventures, Hashed, DeFiance Capital, Signum Capital, Dragonfly Capital, CMT Digital, Alameda Research, HyperChain Capital, GBV Capital, Delphi Digital, Sfermion, Coin98 Ventures, Yield Guild Games, Kyber Network, Fenbushi Capital, Merit Circle, BITKRAFT Ventures, Alex Svanevik, Holly Liu, and Kun Gao.
Immunefi ($5.5M) | DeFi's leading bug bounty platform — with participation from Electric Capital, Blueprint Forest, Framework Ventures, Bitscale Capital, IDEO Colab Ventures, The LAO, BR Capital, and North Island Ventures.
Duelist King ($1M) | Democratizing NFT card game — with participation from Momentum 6, Shima Capital, X21 Digital, AU21 Capital, Magnus Capital, BenMo Labs, BX Venture, Banter Capital, Astronaut Capital, ExNetwork Capital, Everse Capital, NFT Technologies, OIG Investment Group, ZBS Capital, Boost X Labs, and HG Ventures.
Swivel Finance ($3.5M) | The decentralized protocol for fixed-rate lending & tokenized cash-flows — with participation from Multicoin Capital, IOSG Ventures, CMT Digital, Fenbushi Capital, GSR, SevenX Ventures, OKEX, Ryan Selkis, Matt Batsinelas, and Mehta.
OnChain Studios ($7.5M) | An NFT studio on a mission to empower, educate, & entertain the next generation of collectors — with participation from Andreessen Horowitz, Dapper Labs, Draper Associates, CoinFund, Sound Ventures, Collab+Currency, WndrCo, Ashton Kutcher, Jon Oringer, Miami Angels, Jose I. Rasco, Marco Giberti, Patrick Finnegan, Alexandra Wilkis Wilson, Chris Adamo, Randi Wolfson, Alexander Taub, Adam Garfield, David Goldberg, Demian Bellumio, Mark Kingdon, Raul Moas, Wifredo Fernandez, Tigre Wenrich, Juha Mikkola, Johanna Mikkola, Simkins LLP, Juan Pablo Cappello, Carlos Domingo, Amanda Goetz, Dan Berger, Andrew Steinwold, Al Tylis, and Pareto.
Label Foundation ($1M) | Blockchain-based entertainment-related copyright protection platform — with participation from GBIC (Global Blockchain Innovative Capital), Mindfulness Capital, IOST Foundation, Momentum 6, Adaptive Labs, IceTea Labs, Alphabit Digital Currency Fund, Pragma, Open Track, Slow Mist, Cha & Kwon Offices, and Xangle.
We have also added the following investors: Mindfulness Capital, Finality Capital Partners, Starter Capital, Polybius Capital, and many angels.
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