EIF Invests $30M in Fabric Ventures' Digital Assets Fund

EU Investment Boost for Blockchain Technology

A significant development is occurring within the European Union today, as entrepreneurs focused on blockchain technology frequently encounter difficulties securing funding due to a limited number of substantial investment funds and specialized expertise. The European Investment Fund (EIF) is now making a noteworthy investment into a venture fund specializing in blockchain and digital assets.

Fabric Ventures Secures $130 Million

Fabric Ventures, a venture capital firm located in Luxembourg and dedicated to supporting the “open economy,” has successfully closed its 2021 fund with a total of $130 million. A substantial $30 million of this capital originates from the EIF.

The fund’s investor base also includes 33 founders, partners, and executives from prominent companies such as Ethereum, (Transfer)Wise, PayPal, Square, Google, PayU, Ledger, Raisin, Ebury, PPRO, NEAR, Felix Capital, LocalGlobe, Earlybird, Accelerator Ventures, Aztec Protocol, Aragon, Orchid, MySQL, Verifone, OpenOcean, and Claret Capital.

First EIF-Backed Digital Asset Fund

This investment marks the inaugural fund backed by the EIF with a specific mandate to invest in digital assets and blockchain technology.

EIF's Strategic Objectives

“We are very pleased to be partnering with Fabric Ventures to introduce this specialized fund focusing on Blockchain technologies to the European market,” stated Alain Godard, Chief Executive of the EIF. “This collaboration aims to address existing needs within Europe and unlock financing possibilities for entrepreneurs operating in the blockchain technology sector—an area of crucial strategic importance for the EU and its global competitiveness.”

Geopolitical Considerations

The underlying implication is that the EIF seeks to gain exposure to these emerging, decentralized platforms. This could potentially serve as a counterbalance to the centralized platforms originating from the United States and China.

Growth in Decentralized Finance and NFTs

Despite fluctuations in the price of Bitcoin, considerable investment continues to flow into the decentralized finance (DeFi) sector, currently totaling $100 billion, and the non-fungible token (NFT) market, which has reached $1.5 billion. The development of this technology is demonstrably ongoing.

Fabric Ventures' Background

Fabric Ventures possesses a strong foundation, with team members previously involved in projects like Orchestream, the Honeycomb Project at Sun Microsystems, Tideway, RPX, Automic, Yoyo Wallet, and Orchid.

Leadership Team

Richard Muirhead serves as the managing partner, alongside partners Max Mersch and Anil Hansjee. Hansjee has transitioned to general partner after leading PayPal’s Venture Fund for the EMEA region. The team brings expertise in areas such as token design, market infrastructure, and community governance.

Previous Success with Firestartr

The same team previously launched the Firestartr fund in 2012, providing early funding to companies including Tray.io, Verse, Railsbank, Wagestream, and Bitstamp.

A User-Owned Web

“It is now widely recognized that a web owned by its users is needed, and consequently, one that is more focused on human needs,” Muirhead explained. “There are incredibly talented individuals building this digital infrastructure for the benefit of everyone. We are thrilled to support these individuals with our latest fund.”

EU's Vision for Blockchain

During a discussion with TechCrunch, Muirhead emphasized: “A key point to understand is the acknowledgement at the European Commission level that this field holds geopolitical significance for the EU. There’s a contrast between the ‘Wild West’ approach seen in North America and, arguably, the surveillance-focused system in China.”

“The European Commission, I believe, envisions a third path that empowers the individual and utilizes this new technology to their advantage,” he continued. “This extends to businesses as well, enabling networks and marketplaces where individuals can share data for mutual benefit, and businesses within supply chains can collaborate through data sharing.”