The Web3 venture capital firm Hack VC is seeking to invest $150 million in early-stage firms focused on artificial intelligence (AI) and cryptocurrency.
The New York-based venture capital firm announced on February 20th that the majority of its cryptocurrency-focused investments would target the domains of decentralized finance (DeFi), real-world asset (RWA) tokenization, and blockchain infrastructure solutions.
Future investments will be directed toward projects that improve the use and “capital-efficiency” of cryptocurrencies as well as initiatives to reduce smart contract and protocol attacks, which, according to Hack, are similar to the viruses that afflicted early internet users in the 1990s.
“Before Web3 is ready for prime time, there needs to be an infrastructure paradigm shift across scalability, security, and usability,” stated Hack.
The venture capital firm further stated that it would make significant investments in the “Web3 x AI” field, including funding for initiatives like Ritual, an AI coprocessor for blockchains, and Jasper AI, a generative AI copilot for businesses.
Despite a protracted bear market that saw the whole cryptocurrency market decline from $3 trillion to $828 billion between 2021 and 2023, according to CoinGecko data, Hack said that it had maintained a “deep conviction” for cryptocurrencies.
In February 2022, Hack had previously established a $200 million venture fund to support cryptocurrency firms in their early stages.
According to Hack, the company’s next investments will range from several million dollars for larger initiatives the company believes in to hundreds of thousands of dollars for smaller projects with lone founders.
Since entering the Web3 market in 2014, the venture capital firm has made over 100 investments and seeded dozens of unicorns, or firms with a valuation of $1 billion or more. Notable examples of these include the decentralized wireless network Helium, layer-1 blockchain Sui, and Ethereum infrastructure firm Consensys.
According to latest data, venture funding for Web3-related startups came to a total of $1.9 billion in the fourth quarter of 2023.
For the first time since the first quarter of 2022, investments in Web3 firms increased, with a 2.5% gain from the third quarter.
Lightspeed Faction made one of the biggest investments in the fourth quarter. In November 2023, the organization established a $285 million fund specifically for Web3 entrepreneurs.
China’s state-owned National Engineering Laboratory also declared in December 2023 that it will establish a $10 billion Web3 fund with an emphasis on nonfungible coins, virtual reality, and the metaverse.
