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Pantera Capital: Dominating the VC Platform

 Pantera Capital: Dominating the VC Platform

A Crypto hedge fund with over 60 investments in the blockchain space, Pantera Capital is not uncommon name among Crypto enthusiasts. Pantera Capital is one of the leading blockchain investment firms and one of the largest institutional owners of cryptocurrencies. Several startups have seen investments from Pantera Capital over the years; notably, Ripple, Circle and Bakkt to name a few.

Originally founded in 2004, Pantera Capital had been primarily working with global macro hedge-fund investments. They pivoted to focus on Bitcoin and other digital currencies in 2013, and made their mark in the industry as the first US Bitcoin investment firm in history.

 

The good, bad and ugly

Although Pantera Capital have had a successful innings in the investment game, they stepped into troubled waters in late 2018. 

Following the announcement by US Securities and Exchange Commission (SEC) that enforced penalties against some companies, Pantera Capital claimed that around 25% of the projects its ICO fund invested in, had to file for refund to the investors.

 

Pantera’s co-chief investment officers Joey Krug and Dan Morehead stated in a newsletter:

“While we believe the vast majority of the projects in our portfolio should not be affected, approximately 25 percent of our fund’s capital is invested in projects with liquid tokens that sold to U.S. investors without using regulation D or regulation S.”

Earlier this year, Pantera Capital’s Digital Asset Fund saw shrinkage in value with reports revealing that the U.S. investment firm was down 40.8%. The fund’s compound annual growth rate (CAGR) also dropped by more than 50% since launch.

 

Portfolio Analysis

Some of Pantera Capital’s distinguished investments include a plethora of startups that have had substantial significance in the crypto space. They include: 

The latest investment includes Tagomi Systems which raised $28M out of which Pantera Capital invested $12M in the fundraising round according to InWara’s private funding database. The firm, which offers execution services for crypto investors, has the former head of electronic trading at Goldman Sachs as its co-CEO.

Bakkt is building an open, seamless global network that enables users to buy, sell, store and spend digital assets simply, safely and efficiently. In their Series-A round, Pantera Capital along with Horizons Ventures, M12 and 10 other investors invested a total of $182.5M, according to InWara’s private funding database.

Circle is an internet finance powerhouse, built on blockchain technology and powered by crypto assets (OTC). Pantera Capital participated in Series B, C & E funding rounds providing $17M, $50M and $110M respectively, along with other investors like Blockchain Capital, Goldman Sachs and Accel to name a few, according to InWara’s private funding database.

Being one of the most successful Blockchain Platforms in the current market, Ripple is a decentralized global payment protocol that enables banks and other financial institutions to send money to each other without the need for a trusted intermediary.

 

Year wise Private Funding Data of Pantera Capital

Year Wise Private Funding Data Of Pantera capital

Source

 Pantera Capital maximized its participation in funding rounds in 2018 and has invested ~$500M along with other VCs in the year widely touted as the ‘Crypto-winter’. To put things in perspective, ICOs raised $6.3B in 2018. This shows that Pantera backed investments akin to ~7.9% of all ICO funding.

 

Various Investment Stages of Pantera Capital

Investment Stages of Pantera Capital

Source

Over 70% of Pantera Capital’s funding has favored Seed rounds and Series-A rounds which clearly suggests that they are most likely to fund the initial stages of a company.

 

Pantera is fulfilling its strategic investment philosophy by building a diversified portfolio and bringing industry-specific, value-added resources to its portfolio companies. So far Pantera has invested in 14 different industries - from Cybersecurity to Blockchain Platforms, across 12 different geographies and 5 continents. Within the next several years, they envision blockchains and digital currencies having an established, responsibly managed, and regulated role in the global economy, soon after disintermediating a myriad of industries.


February has shown a significant improvement in the ICO market despite the lingering Crypto Winter. This means that Venture Capitalists and other investors have a higher prospect of investments in the coming months. Read more about the full report on February here.