Seven Seven Six, the venture capital (VC) firm founded by Reddit co-founder Alexis Ohanian, intends to make its first direct foray into the cryptocurrency industry and raise $177.6 million.
The fund called “Kryptós” would focus on investing in cryptocurrencies, citing the current market volatility as an ideal time to enter the industry, according to a story from The Information on August 29.
According to the venture capital business, the Kryptós fund will invest mainly in cryptocurrencies that trade more reasonably after the market price decline.
“This is the best time to buy if you’re long on the industry. It’s on sale. Everything is on sale,” said Seven Seven Six’s founding partner, Katelin Holloway.
Seven Seven Six’s foray into digital assets is a result of its April registration as an investment adviser, which permits it to invest in cryptocurrencies.
Reddit co-founder Alexis Ohanian. Photo: Web Summit / Flickr
Investors will receive a 25% carried interest.
According to the fund’s promotional materials, investors would be paid a 2.5% management fee, making them eligible to earn a carried interest of 25%. The returns might increase to 35% if Kryptós achieves fivefold or more significant profits.
The venture capital firm’s entry into cryptocurrencies during a period of falling prices shows that the firm is relying on a future market recovery. Numerous crypto experts concur with this prognosis and assert that the current market conditions are transitory and part of the growth trajectory.
It is uncertain how the current market conditions will affect venture capital investment for crypto and blockchain startups. Investments in blockchain companies increased by nearly 600% in 2021, reaching $14.8 billion.
At the same time, established companies like Alphabet have emerged as leaders in the crypto industry.
Ohanian’s crypto advancements
Notably, this is not the first time Ohanian has been involved in crypto since Reddit has made significant inroads into the industry. As part of its push into the non-fungible token (NFT), the social networking platform, for example, announced an avatar marketplace.
Using a credit card, users can acquire blockchain-based profile images at a predetermined price, removing the need to hold cryptocurrency. Reddit has also partnered with the cryptocurrency exchange FTX to integrate its Community Points worldwide.