French Venture Capital Funds Accelerate in Cryptocurrency

This presents a double risk to crypto startups. On the one hand, funding is becoming scarcer, and on the other hand, the price of Bitcoin and other Ether is not looking good. However, these phenomena do not prevent venture capital (VC) funds.

For several months, the French have been increasingly active in this sector. Eurazeo and Aglaé Ventures just led a $30 million seed funding for crypto market maker Flowdesk, along with dozens of other investors including ISAI, Speedinvest and Coinbase. “I really wanted traditional French venture capital funds because I need people close to me, so this is my first venture into entrepreneurship,” says Guilhem Chaumont, co-founder of the startup.

Eurazeo, which has two crypto experts on its team, has invested in other nuggets in the sector such as Afive (Bitcoin payment) or Sorari (Panini 3.0 cards). “In 2021, cryptocurrency represented about 20% of our transaction flow,” says Nicholas Debuk, the fund’s manager, who notes that he has recently submitted new investment proposals.

Lots of stocks, few icons

The latter is a former employee of Xange, another French VC who bet in 2014 on Ledger and notably has Dogami (metavers) and Request Finance (crypto accounting) in his wallet. To improve the source files, the management company has just hired Luc Jodet, co-founder of Arianee, a program that helps brands create, distribute, and use NFTs. “We need to increase our coding efficiency. Let’s say we are a green belt and we need to be Dan’s third black belt,” photo of Cyril Bertrand, Xange Partner.

Alvin also hired an industry professional who also cut his teeth at… Xange. Since 2019, Bartosz Jakubowski has invested in ten cryptocurrency start-ups, thus witnessing the development of the market. Previously, crypto projects were viewed as highly speculative because they were tied to a token [une cryptomonnaie, NDLR]. Today, we understand that there are long-term projects, assures the investor, who notes a general acceleration with the advent of the term “Web3”. “It gives the impression that it is an inevitable phenomenon.”

Alven invests in both stocks and tokens in cryptocurrency startups. A strategy that has been widely embraced by American funds including star Andreessen Horowitz, but is still a little democratic in France due to regulations. European directives mandate a depository who can hold cryptocurrencies.

A more mature ecosystem

In France, there is no player approved by the Financial Markets Authority (AMF). “We are thinking of a rather strange structure to allow these investments in tokens like SAFT, a future token purchase contract,” says Stéphane Daniel, an associate attorney at d&a Partners who specializes in blockchain. Many funds want to invest in tokens and are looking to structure funds. “Their investors are very demanding,” adds Stefan Daniel. Xange specifies that this is an “ongoing” topic while Eurazeo does not “for the time being”.

Cathay Innovation, for its part, will invest in the tokens through a brand-new €100 million fund created with Ledger. To be able to do this, I created a Free Partnership (SLP) company. “It’s a company used as a fund,” Stefan Daniel summarizes.

Enthusiasm for French funds, whether in stocks or tokens, is linked to the maturity of the tricolor ecosystem. Many entrepreneurs have started recently. Nicholas Dubuque recalls:

“We have a lot of talent in France and entrepreneurs. So naturally there are a lot of projects coming up now,” adds Frank Desvins, partner at True Global Ventures (TGV), a blockchain fund that has just completed a new “late stage” vehicle worth $146 million. dollar. A portion of the next fundraising will be dedicated to the metaverse platform The Sandbox, which TGV has bet on since 2019.

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