Last Updated on September 17, 2024 by Nisar
Hack VC Exceeds First Fundraising Target
For its third fund dedicated to blockchain technology, Hack VC, a well-known crypto venture capital firm co-founded by blockchain gurus Ed Roman and Alex Pack, has successfully raised $77 million. According to recent filings with the Securities and Exchange Commission (SEC) and internal documents shared with investors, the fund has already surpassed its original target of $80 million. An anonymous individual with knowledge of the situation confirmed the information to Fortune.
Robust Initial Gains for Hack VC’s Third Fund
The third fund from Hack Ventures was established in 2023 and is mostly focused on seed-stage investments in new blockchain and cryptocurrency ventures. Even though the fund is still relatively new, it has already generated a net return that is 1.7 times the initial investment. This early success is a testament to the company’s ability to recognize high-potential prospects in the quickly developing cryptocurrency market. Regarding these developments, Hack VC has not offered any commentary.
Growth of Crypto Funds in a Market with Competition
Smaller funds have also made big movements, even though the previous crypto cycle was driven by megafunds like a16z crypto, Paradigm, and Haun Ventures who raised billions to invest in blockchain technologies and digital assets like Ethereum and Solana. Companies like Electric Capital and Dragonfly raised hundreds of millions, demonstrating the competition and diversity in the market. Leading the way is managing partner Alex Pack, a former advisor at Huobi and co-founder of Dragonfly. In 2021, Hack VC raised $206 million for its first seed fund.
The past performance of Hack Venture’s funds
Launched in 2021, Hack VC’s first seed fund returned 90% of the original amount invested, showing minor losses. But the company didn’t wait long to follow up with a second fund of $150 million in 2022, this time focusing on token investments and later-stage businesses. This second fund has performed far better, with a 150% net return. Pack stressed the fund’s focus on infrastructure projects and compared the crypto industry to the “mid-1990s equivalent of where the internet was” in a Bloomberg interview earlier this year.
Prominent Financial Assets and Fund Results
Internal documents reveal that Hack VC’s second fund has committed barely half of its $150 million in cash ($75 million of which has already been spent), yet its holdings are already valued at $150 million. Projects like Elixir, a liquidity network for cryptocurrency exchanges, and io.net, a decentralized cloud computing network, are among the most successful investments. For its third fund, Hack was allegedly hoping for at least $100 million; however, the goal was eventually lowered to $80 million. According to late August SEC filings, Hack started capital raising in September 2023 and has raised over $77 million so far through a variety of investment vehicles, one of which being a feeder fund for foreign investors.
Hack VC Is Unique in a crowded field.
With its most recent fund, Hack VC joins ParaFi’s $120 million fund and Lemniscap’s $70 million fund, both announced in August, as the largest cryptocurrency venture funds raised in 2024. Furthermore, Accolade, a blockchain fund of funds, has raised over $135 million through two new vehicles and continues to raise money. Notwithstanding the inflow of funds, the cryptocurrency market is still unstable due to persistent regulatory concerns and the stabilization of important assets like Bitcoin and Ethereum following a recent surge.
A competitive advantage and future outlook
Hack VC has succeeded in carving out a niche for itself in a very competitive market by routinely obtaining allocations in well-liked, frequently oversubscribed cryptocurrency projects that are difficult for smaller investors to get into. The company has made significant investments in a range of cryptocurrency-related fields, from smaller decentralized finance (DeFi) protocols to bigger blockchain initiatives like Berachain. With only half of the committed cash spent, Hack VC has not yet issued returns for its $150 million second fund, according to an investor. They do, however, expect to receive reimbursements in the upcoming years.
