Just Like FTX, FTX Ventures Went Big — And Fast — When It Came To Investing

Illustration of Magic 8 Ball as earth with Outlook Not So Good fortune

While everyone is still sifting through the immediate FTX wreckage, there is a good chance more decimated debris is on the way.

Along with trying to be a white knight to companies such as Voyager Digital and lender BlockFi, Sam Bankman-Fried and his company also made their way to the venture world early this year.

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FTX Ventures announced its first $2 billion funding in January and quickly made nearly 50 different investments from the new venture arm, according to Crunchbase data. Those rounds in total raised nearly $3 billion for burgeoning startups, with FTX Ventures leading some of the biggest of those deals.

The firm made waves right from the start when it hired former Lightspeed partner Amy Wu to lead its ventures, M&A and commercial initiatives. She reportedly stepped down late last week as FTX started to implode.

It also didn’t stop making news until nearly right up to the dying breaths of its parent. On Nov. 3, it was reported the venture arm had led a seed round for Web3 social media startup Lens Protocol for an undisclosed amount.

While that round was likely closed weeks — if not months — ago, it would be just days later when Binance CEO Changpeng Zhao tweeted his exchange would sell its holdings of FTX’s native token FTT, and FTX’s house of cards began to crumble.

Going big

Out of the 47 rounds FTX Ventures participated in, the firm led or co-led 19 including some of the largest, according to Crunchbase data.

In early September, it led a $300 million Series B into Mysten Labs, the developer of the Sui Layer 1 blockchain, that valued the startup at more than $2 billion.

In July, it co-led the $150 million Series A for Palo Alto, California-based Aptos Labs, valuing it at more than $2 billion. It also took part in a $200 million investment for the Layer 1 system blockchain just four months earlier.

In March, FTX Ventures co-led LayerZero Labs’ $135 million Series A. The round minted LayerZero, which creates software to connect  applications across different blockchains, a unicorn. However, The Information reported last week that LayerZero was able to return funding in exchange for getting its shares back after learning of the bankruptcy.

Aside from rounds it led or co-led, FTX Ventures also participated in a huge $450 million “seed” round for Miami-based Bored Ape Yacht Club NFT creator Yuga Labs, and a $350 million round into Ethereum rival NEAR Protocol.

The end

Now, as FTX and more than 130 of its affiliated entities declare bankruptcy, it seems crypto has lost a venture firm primed to be a big player in the Web3 space. With funding in the industry being down, that could spell doom for some startups, especially those still relatively young in the nascent space.

FTX Ventures launched in January with a blog posting, announcing to the world it would be “for builders, by builders,” and that it could invest in “at any check size and stage.”

“We measure time horizons in decades,” it reads. “We don’t mind if you’re anon. We won’t ask you to present in front of an investment committee.”

When it comes to vetting, it seems like the venture arm learned from FTX’s own investors.

FTX did not respond to a request for comment.

Illustration: Dom Guzman


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