MEET THE BLOCKCHAIN UNICORNS - MID-YEAR 2021

Blockchain Coinvestors Newsletter

Vol. 3, No. 15, July 2021

Last week we published the most up to date listing of blockchain unicorns - both private enterprises and crypto projects currently trading at a market value in excess of $1bn. This week we summarize our observations about the significant changes of just the last six months, and the implications they have for investors. You can listen to the complete report by following this link to the recorded webinar Meet the Blockchain Unicorns - Mid-year 2021.

We have seen an acceleration of value creation in the blockchain sector as well as an increasing number of going public events - both IPOs and SPACs. We are excited that through the Blockchain Coinvestors investment strategy, we now have capital invested in 65% of the blockchain enterprise, and 45% of the crypto project unicorns. See the entire Blockchain Coinvestors portfolio at www.blockchaincoinvestors/portfolio.

Blockchain Enterprise Unicorns

There are now 26 blockchain enterprise unicorns. This period we saw the additions of Dapper Labs, BlockFi, Paxos, Mercado/2TM, Bithumb, Ledger, Upbit, BitPanda, Amber, Animoca, Bitso, and Forte to our list following their recent funding rounds. This after the loss from our list of several unicorns that have now gone public. Blockchain Coinvestors has capital invested in the unicorns shaded in blue.

Importantly, we continue to see an expansion of value in all layers of the blockchain technology stack, and worldwide. The following chart aligns the 26 blockchain enterprise unicorns by their positioning in the technology stack (foundational, transactional or application layer) and by geography. Please note that most of the foundational layer unicorns have chosen to take the crypto project funding route and are discussed below. Since blockchain is to a significant extent about the creation of a functional 'Internet of Value', it is not surprising that most of the enterprise unicorns focus on the transactional layer.

Crypto Project Unicorns

As we have previously explained, blockchain teams have the option of either raising equity through traditional funding rounds, or launching crypto tokens to their communities and supporters to raise their capital. At the end of the first quarter, there were 76 crypto projects with tokens trading at more than $1 billion of market value across a range of cryptocurrencies, crypto commodities, protocol, and DeFi tokens.

Here at Blockchain Coinvestors we have capital invested in 45% of these crypto project unicorns, focusing on the protocol and DeFi tokens.

Going Public Events

In the first half of 2021 we saw a number of blockchain enterprises go public through IPOs and de-SPAC mergers. While Coinbase was the one that got most media attention, we were just as focused on the milestone that the world now has a critical mass of pure play public blockchain companies to support indices, ETF's, and other public market focused financial products.

IPOs vs SPACs

We have mentioned before that we expect SPACs to be a preferred going-public option for blockchain and crypto enterprises that believe they need to be public companies. The recent announcements from Circle and Bullish are just the beginning of what we expect to be quite a wave that will follow. There are clear reasons why SPACs can be more attractive than traditional going public approaches as indicated in the following exhibit from our webinar What are SPACS and Why Are They Relevant to Blockchain and Crypto.

We continue to believe that this acceleration of value creation in blockchain is driven by fundamental tailwinds which are not going to stop any time soon. The world is moving towards a global digital economy that we call the Fifth Era, and yet we can't get there without complementing today's Internet with more powerful approaches to Security, Identity, Decentralization, Digital Monies, and Digital Assets as outlined in our book, Blockchain Competitive Advantage that can be downloaded for free.

This is where we at Blockchain Coinvestors focus our investment thesis.

Thank you for reading.

Alison Davis
Matthew C. Le Merle

ABOUT BLOCKCHAIN COINVESTORS

Launched in 2014, our goal is to provide broad coverage of the emerging unicorns and fastest growth blockchain companies and capture superior returns through investments in the leading blockchain venture partnerships. The strategy is now entering its 8th year and has to date invested in 25 pure play blockchain venture funds in the Americas, Asia and Europe; and in a combined portfolio of more than 300+ blockchain and crypto projects including 30+ blockchain unicorns. Headquartered in San Francisco with a presence in London, Menlo Park, New York, Zug and Zurich, the alternative investment management firm was co-founded by Alison Davis and Matthew Le Merle.

FUND PERFORMANCE

Blockchain Coinvestors Funds are continuing to generate strong returns. To date, over 80% of the funds we are invested in are performing as top quartile funds against the Cambridge Associates benchmark. This remarkable performance results from powerful tailwinds driving the world towards a future in which digital monies and digital assets are ubiquitous and the businesses and projects providing blockchain and crypto products, services, and infrastructure benefit disproportionately.

BLOCKCHAIN COINVESTORS FUNDS

Blockchain Coinvestors’ goals are to provide broad coverage of the emerging unicorns and fastest growth blockchain companies and to capture superior returns from investing in the leading blockchain venture partnerships:

  • Fund III is open only to investors who meet the Qualified Purchaser definition with a minimum subscription of $250,000.

    • A “qualified purchaser” is an individual or a family-owned business that owns $5 million or more in investments. The term “investments” shouldn't include a primary residence or any property used for business.

  • Fund III Parallel is open to investors who meet the Qualified Client definition with a minimum subscription level of $250,000 at the discretion of the Manager. Please contact ir@blockchaincoinvestors.com if the minimum is of concern.

    • Currently, an individual or entity is a qualified client if he, she, or it: (i) has a net worth of $2,100,000 prior to investment in the fund (excluding the value of his or her primary residence).

While the two funds are substantially the same, there may be some funds and investments that are only available in the Qualified Purchaser vehicle. Blockchain Coinvestors funds can take investments via IRAs. We support several providers, including AlgoIRA, Kingdom Trust, Millennium Trust Company and Pacific Premier Trust Company (Pensco).

Please visit the Blockchain Coinvestors website to learn more about our offerings. You can also reach our Investor Relations team directly at ir@blockchaincoinvestors.com.

BLOCKCHAIN COINVESTORS SWISS

We are excited to announce that Blockchain Coinvestors Funds are now available through Swiss certificates for those of our non-US investors who prefer this approach. The underlying fund is the same, however, our Zurich based team at Blockchain Coinvestors Swiss, who will introduce in future weeks, can provide detailed information regarding this investment option. Email us at mlemerle@fifthera.com to learn more.

LINQTO
'Private Investing Made Simple'

While our funds are only available to Accredited Investors who are also Qualified Clients we believe in the democratization of investment access to all investors and look forward to that day. In the interim, we have partnered with Linqto which is an easy to use Mobile and Web app that makes it exceptionally easy to invest into attractive opportunities. The provide access to Accredited not Qualified Client investors as well as much lower minimums. Go to Linqto.com or download the app from your App store to use this approach.

BLOCKCHAIN COINVESTORS ANGELLIST SYNDICATE

Continuing the theme of the democratization of investing, we have a rapidly growing Blockchain Coinvestors syndicate on AngelList providing access to selected coinvestments. Please join us and our partner Lou Kerner on AngelList.

Click here to receive the insightful weekly crypto newsletter and webinar invitations from our Blockchain Coinvestors partner Lou Kerner.

REGISTER NOW FOR UPCOMING WEBINARS AND CALLS

Our investment team hosts bi-monthly webinars and calls to help educate our community about the Fifth Era, fintech, blockchain and crypto. We discuss important trends, tailwinds and investment themes including what we have learned and how we are using our knowledge to inform our own investment thesis and actions. Below is a list of upcoming webinars for which you can register by clicking the links:

Investing in Early Stage Tokens

- July 19th, 7:00am PST

- July 19th, 12:00pm PST

Options for Investing in Blockchain & Crypto

- July 26th, 7:00am PST

- July 26th, 12:00pm PST

Investing in Early Stage Tokens

- August 2nd, 7:00am PST

- August 2nd, 12:00pm PST
 
Recordings of past webinars and calls can be found at www.fifthera.com/webinars.

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