Today Seattle-based Bloccelerate announced the closing of a $12 million fund. The vast majority of funding in the enterprise space has come from corporates rather than venture capital and that’s not just consortia. Even most standalone startups are backed by the corporate venturing arms of major enterprises.
However, Bloccelerate’s focus is on enterprise applications and institutional adoption rather than necessarily permissioned blockchain. CEO Kate Mitselmakher spent time on enterprise technology at Gartner and the Lead Advisor to the fund is a former Gartner Research VP. General Partner Sam Yilmaz co-founded a Decentralized Application Fund in 2014, which sold its assets in late 2017.
Across seed to Series B, Bloccelerate plans to target investments of $500k to $2 million in Europe and North America alongside an unspecified co-investment vehicle.
Started in 2018, the firm has already made five investments, including in enterprise-focused startups such as Symbiont in capital markets and BlockApps. Bloccelerate also invested in MakerDAO, the public blockchain stablecoin, where some startups are experimenting with tokenizing trade finance assets.
Symbiont is a reasonably big fish in the enterprise blockchain startup space. It recently completed an asset-backed securities (ABS) pilot for Vanguard, which also involved BNY Mellon, State Street and Citi (an investor). That’s one of at least three projects that Symbiont has with Vanguard, including for foreign exchange and index data.
The other Bloccelerate investment is in BlockApps, which recently collaborated with Bayer Crop Science to trace harvests back to seed.
The firm’s investment thesis targets revenue-generating use cases between stakeholders that either don’t know or trust each other. And it believes there’s too much focus on payments when blockchain technology can power numerous different types of applications.
In Europe, the venture fund with a similar focus is LeadBlock.
But these specialist funds need to be put in context. In April, Andreessen Horowitz / a16z raised $515 million for its Crypto Fund II. The majority of single investments made by a16z are significantly north of $12 million, even at the Series A stage.
It’s fair to argue that Bloccelerate is targeting a niche and hence might find some neglected gems. But one of the challenges is the big bucks raised by the likes of a16z are spent on a similar talent pool, raising the entry costs for enterprise blockchain startups that want to attract top tier talent.