The C1 Fund, a joint Silicon Valley and United Arab Emirates initiative, is actively scouting opportunities in the Australian market. Specifically, the fund is targeting established crypto firms, with a particular interest in Animoca Brands, a blockchain gaming enterprise, and Chainalysis, a leading data analysis firm. The strategy, as detailed in a pitch deck obtained by The Australian Financial Review, involves acquiring secondary shares in these firms at significant discounts, ranging from 50% to 80% below their last valuations.
The C1 Fund, established by former Coinbase lawyers and investors, is focusing on companies that have achieved a minimum last-round valuation of $300 million, particularly those in the Series C funding stage or later. With an investment range between $20 million to $50 million per company, the fund aims to capitalize on the current market conditions, including hyperinflation and rising interest rates, which they believe have resulted in attractive valuations in the digital assets market.
Targeting high-value crypto firms
Animoca Brands, once listed on the Australian Securities Exchange, is among the primary targets for the C1 Fund. Following its delisting in 2020 due to governance issues and involvement in crypto activities, Animoca has rebounded, reaching a valuation of $5.9 billion last year. Despite this growth, the C1 Fund is looking to purchase shares at approximately $0.73 each, a 75% reduction from its last capital raise price.
Similarly, Chainalysis, valued at $8.6 billion in 2022, is known for its blockchain analysis and investigation services and reportedly has around $30 million shares available on the secondary market, with C1 Fund offering to buy at a 65% discount. This aggressive investment approach aligns with the fund’s broader strategy to invest across multiple geographies, focusing on blockchain, crypto, web3, and fintech companies.
Market trends influencing investment strategies
The recent surge likely influenced the C1 Secondaries Fund’s investment decisions in the crypto market, which has seen Bitcoin’s value rise above $40,000 and the overall market capitalization exceed $1.6 trillion. This upswing in the market provides a unique opportunity for funds like C1 to acquire shares in crypto companies at discounted rates.
Additionally, the non-fungible tokens (NFT) market is experiencing a significant boom. As per a DappRadar report, the trading volume for NFTs approached $1 billion in November, with the average transaction value in the same month showing a more than 100% increase compared to previous months. This burgeoning interest in NFTs and the overall bullish sentiment in the crypto market are pivotal factors in C1 Fund’s investment strategy.
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