Equilibrium Ventures (EQV), a new seed-stage crypto fund headquartered in Finland, has hit the first close of a targeted €30m fund amid a renewed interest in blockchain startups, telling Sifted that roughly 20% — €6m — is committed from LPs already.
Following a bruising crypto winter, which saw VC investment plunge globally from $21.2bn in 2022 to $4.1bn in 2023, regulatory changes in the US and Europe rolled out this year may increase investor confidence in the asset class.
That’s something that Equilibrium is likely hoping to be true as they join Europe’s small but growing crypto venture ecosystem.
While the size of the fund is still a far cry from the billions allocated to crypto by US investors, there’s been some notable movement recently from Europe-focused crypto VCs.
1kx, a venture firm that’s invested in crypto startups like Paris-based Kiln and London’s Qredo, closed a $75m fund in March. And at the tail end of last year, Danish VC fund Heartcore closed €15m of a targeted €20m fund to invest in protocols and tokens.
Other notable European funds in the space include Berlin’s Greenfield Capital, London’s Fabric Ventures and Cherry Ventures’ crypto fund.
Equilibrium plans to differentiate itself by relying on its team’s technical know-how, hoping to draw in founders looking for an investor who knows their zero-knowledge proofs from their smart contracts.
The fund is a venture offshoot of its eponymous, Helsinki-based parent company that’s largely known in developer circles as an engineering company building open-source projects for blockchains networks such as Solana and Starknet.
The Equilibrium parent company has also backed some of the companies it’s partnered with off its own balance sheet — and this new VC fund is a way of formalising those investments by involving outside investors.
“We think there’s an opportunity to fund founders in Europe — it’s a little bit of an underfunded market,” says partner Mika Honkasalo. “Even though it’s not our complete focus, we think there’s a particular advantage to having a background as a European engineering company.”
Technical expertise
Honkasalo is joined by Henrik Sundvik, previously part of consulting firm Bain & Company's private equity practice, and ex-Molten Ventures investor Christopher Ahn. The wider company also employs around 70 blockchain engineers, most of which are in Europe thanks to its Finnish base.
The venture fund claims its engineering expertise gives them the edge in sourcing deals for startups in the category of crypto infrastructure, which they’ll focus on.
“We’re probably one of the only funds out there that can do proper tech due diligence, which is sorely needed for the long-term sustainability of this industry,” says Ahn. “We’re also offering tangible value add. If you’re a pre-seed and seed engineering company, we can actually help you build.”
Ahn and Honkasalo say that LPs also come to Equilibrium looking for technical advice on potential crypto investments. Along with strategic investors and family offices, some of the LPs in the fund include Sebastien Borget, cofounder of metaverse platform The Sandbox and an active angel investor in Europe’s crypto scene.
The team says it’s on track to get to its second close of 80% of the fund by the end of this summer.
