C1, a venture capitalist firm founded by former Coinbase lawyers and investors, is planning to invest in the cryptocurrency sector in Australia. The firm has a fund size of $500 million and aims to purchase private holdings of cryptocurrency companies from the previous funding round, with a minimum valuation of $300 million.
Amidst a decline in Web3 venture capital funding this year, C1 is actively seeking investment opportunities in the cryptocurrency sector in Australia, according to the Australian Financial Review (AFR). The company plans to utilize its $500 million fund to acquire private holdings from investors at a discount to the previous valuation.
C1’s investment strategy focuses on buying private holdings of cryptocurrency companies that were valued at least $300 million in the previous funding round, with investments ranging from $20 million to $50 million. The company proposes to purchase these shares at a discount of 50% to 80% compared to the previous valuation, considering the attractive valuations offered by the digital asset market in the secondary market under current market conditions. A financing presentation obtained by AFR stated:
C1’s target companies include Animoca Brands, a blockchain-based gaming company that was listed on the Australian Securities Exchange (ASX). Since delisting from ASX in 2020 due to the conversion of its stocks into cryptocurrency tokens, Animoca’s valuation has grown from $120 million to $7.8 billion. C1 has proposed to purchase shares from Animoca at a price of $1.12, representing a 75% discount to the last funding round price of $4.5.
Additionally, C1 is also interested in Chainalysis, a company that provides blockchain analysis services. Chainalysis has an estimated valuation of $8.4 billion in 2022, and C1 has indicated that there are approximately $30 million of secondary preferred shares available for purchase at around $15 per share, representing a 63% discount to the last funding round.
However, not all notable Australian companies are within C1’s scope. For example, Immutable, a highly recognized cryptocurrency game developer, stated that C1 has not approached them or their investors to purchase secondary shares, and their last secondary share sale was conducted at a valuation of $2.5 billion by the US-based venture capital firm PrinceVille.
Despite promoting itself as a partner to assist risk investors in exiting the market, C1 seems to have few local investors willing to give up their investments that have persisted in the cryptocurrency market during the years of downturn. According to Coindesk’s report, Dr. Najam Kidwai, co-founder and managing partner of C1, stated that C1 did not authorize the Australian Financial Review’s report and has not directly met with any of the aforementioned companies so far.
Animoca Brands and Chainalysis have not publicly responded to this report.