Early-stage venture capital firm Dispersion Capital recently exited stealth to launch a $40 million fund for startups working on infrastructure for Web3 projects.
Per an announcement, Dispersion Capital has already invested in 20 companies, “with a majority receiving follow-on financing.”
Dispersion Capital is a global early stage web3 VC fund. We invest in the disruption of the blockchain technology emerging from the web3 infrastructure reinvention which we are calling the “Dispersion Economy”. Dispersion specializes in web3 infrastructure and platforms.— Dispersion Capital (@DispersionVC) May 11, 2022
The firm aims to invest in startups working to “advance cutting-edge infrastructure needed for a multichain, multi-currency, and multi-platform world,” with a particular focus on Web3 and decentralized platforms.
Dispersion Capital’s backing comes from several high-profile organizations, including Ripple, HashKey, Wemade, Circle Ventures, Alchemy Ventures, Cherubic Ventures, Forte and NGC.
The firm’s apparent focus is on expanding infrastructure for Web3 applications. In an interview with TechCrunch, Dispersion Capital founder Patrick Chang explained his organization’s goal was to “get Web3 to a level similar to cloud computing.”
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Chang explained that an influx of Web3 and nonfungible token-focused companies entering the ecosystem in 2021 created the need for stronger infrastructure support. “What was frustrating for users and people coming into web3 was onboarding, scalability and hacks,” Chang told TechCrunch, before adding, “the infrastructure was incredibly immature and people weren’t thinking about it.”
According to the announcement, Dispersion Capital’s sole focus is on funding startups focused on "specific layers of Web3, including fintech and gaming infrastructure, security, data, and platforms challenging legacy industries.”
The timing of Dispersion Capital’s official launch is noteworthy. As Cointelegraph reported on May 12, crypto venture capitalists made $2.6 billion worth of deals in the first quarter of 2023. Overall, such investments were down from 2022, with early-stage ventures down nearly 17% year over year. This was the fourth-consecutive quarter ending with a decline in investments, a trend that threatens to continue as continuing market volatility frames the second quarter of 2023.
Despite this, a report from PitchBook cites “privacy, data management, and security for Web3 protocols” as emerging markets in 2023. This indicates that Dispersion Capital could be well-positioned as the sector moves forward through regulatory uncertainty.