Cherry Ventures, based in Europe, enters the cryptocurrency market with a new $34 million fund
Cherry Ventures, a Berlin-based seed-stage investor best known for its early investments in mobility firms Auto1 and Cazoo, is preparing to trade-in vehicles for cryptocurrency with the launch of a new $34 million fund.
Apart from a pre-seed round in 2018 for NFT company Unlock Protocol, the Cherry Crypto I fund will be the firm’s first significant venture into the digital asset industry, after the debut of its $340 million generalist fund.
According to Patrick Mayr, an investor on the Cherry crypto team, the fund is supported by both existing Cherry Limited Partners (LPs) seeking crypto exposure and new investors investing only in the crypto fund.
While the fund’s staff — which includes former Aragon CTO Brett Sun as a research adviser, MakerDAO’s Luca Prosperi as an advisor, and former Medwing director Yannis Heykin as finance director — will invest internationally, Mayr intends to use Cherry’s European origins to tap into an unexplored market.
“Crypto has a lot of its origins in Europe,” he argues, recalling the debut of Ethereum in Berlin. “However, you’ve just seen an inflow of European crypto founders in the past twelve months – it’s like a cascade of crypto entrepreneurs at the moment.”
Cherry intends to finance crypto entrepreneurs largely via token-based investments rather than shares. The firm has previously made discreet investments in staking platform Lido, loan protocol optimizer Morpho, and decentralised autonomous organisation (DAO) BlackPool, which invests in NFTs.
When asked whether the fund will invest in non-fungible tokens (NFTs), Mayr said that the firm is investigating the industry and had the necessary infrastructure to invest. If Cherry Ventures begins purchasing NFTs, it will join another European venture capital company Blossom Capital, which recently acknowledged in an interview with The Block that it had acquired a digital collectable.
Mayr is particularly interested in the governance component of web3. Numerous, if not all, web3 decentralised protocols allow users to acquire tokens that let them to vote on proposals and so affect the project’s evolution.
“Everyone is still trying to figure out how [government] works,” Mayr explains. “Web3 is still in its infancy. I believe that it is unquestionably an investor’s job to assist influence how these procedures are governed.”