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Welcome again to Chain Reaction, a podcast that unpacks and dives deep into the newest developments, drama and information in crypto with among the greatest names within the trade to interrupt issues down block by block for the crypto curious.
For this week’s episode, Jacquelyn interviewed Maria Shen, a common associate on the funding staff at Electrical Capital, an early-stage enterprise agency targeted on crypto, blockchain, fintech and marketplaces.
Earlier than Electrical Capital, Shen was the CTO and co-founder of Bambify, which helped small to medium-sized companies create extra environment friendly provide chains with producers globally. Previous to that, she labored at Microsoft.
In March 2022, the agency introduced that it closed $1 billion for a pair of crypto funds: a $400 million car for making fairness investments in startups, and a $600 million fund supposed to take a position straight in crypto tokens. Its web site at the moment showcases a portfolio with about 75 investments with crypto startups, together with Magic Eden, ConsenSys and Bitwise, to call just a few.
Earlier this yr, Electrical Capital put out a report indicating that the variety of blockchain builders within the U.S. has declined yearly since 2017, dropping to 29% final yr from 40% in 2017. We dove into what that report actually means and the way it will have an effect on the expansion of builders domestically and internationally.
“Lots of founders have already moved out of america or wish to transfer out of america,” Shen mentioned. “That additionally means after we’re taking a look at investing we’re more and more trying outdoors america for alternatives and fascinating founders.”
We additionally mentioned what crypto sectors she’s waiting for investments, why she’s betting huge on NFTs and the final enterprise capital market sentiment amid a shaky crypto market. She thinks the continued bear market is “going to final some time and goes to be more and more troublesome for corporations to fundraise.”
As for VCs, the macro atmosphere has “shifted a lot” and companies “are elevating much less capital and deploying much less capital. Lots of companies are nearly on the finish of their fund lifetimes.”
General, Shen mentioned the crypto fundraising atmosphere will in all probability change into worse going into subsequent yr. However on a optimistic observe, she sees the present bear market in a greater gentle in comparison with the earlier one in 2018 when “costs have been falling off a cliff.” This market cycle feels “fully completely different,” she mentioned. “Lots of the issues we have been actually dreaming about and speaking about theoretically have been shipped now.”
At this time, the crypto ecosystem has Ethereum-focused scaling options, extra stablecoin choices, decentralized finance, onchain governance and NFTs, Shen famous. “These items didn’t exist in 2018, 2019, so it’s fascinating to see the market maturing past transmitting tokens or cash to at least one one other.”
Chain Response comes out each different Thursday, so make sure you subscribe to us on Apple Podcasts, Spotify or your favourite pod platform to maintain up with the newest in web3 and crypto. To get a roundup of TechCrunch’s greatest and most essential crypto tales delivered to your inbox each Thursday at 12 p.m. PT, subscribe here.
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