Hack VC Raises $77M for Third Fund

Hack VC, a prominent cryptocurrency fund, has raised $77 million for its third fund, bringing it closer to its $80 million objective.

Fortune reported that the fund has surpassed expectations and is now known as “oversubscribed,” citing filings with the Securities and Exchange Commission (SEC), internal documents, and sources with knowledge of the situation.

Alex Pack and Ed Roman, two seasoned blockchain experts, founded Hack VC, which focuses on seed-stage investments.

Hack VC’s Latest Fund Achieves Impressive Returns

In 2023, the organization initiated the deployment of capital from this fund, which resulted in exceptional early returns.

According to the documents provided to investors, a recent upswing in the cryptocurrency market has produced a net return of 1.7 times the initial investment.

In 2021, Hack VC initiated its inaugural fund, which concluded with $206 million in commitments.

Nevertheless, the fund encountered some initial obstacles, resulting in a minor loss and the return of 90% of its invested capital.

However, the firm continued its operations. In 2022, it raised a second fund of $150 million, focusing on token investments and later-stage companies.

The second fund achieved a net return of 150%, with notable success in initiatives such as Elixir, a liquidity network for crypto exchanges, and io.net, a decentralized cloud computing network.

In a recent interview, Pack compared the crypto industry to the internet in the mid-1990s, emphasizing the long-term potential for infrastructure investments.

The second fund has already deployed $75 million, half of the committed capital. Currently, its holdings are valued at $150 million.

Despite a lower objective of $80 million, Hack VC’s third fund has received substantial investor interest despite the initial expectation that it would raise at least $100 million.

As of late August, the fund has already secured over $77 million across two vehicles, including a feeder fund for international investments.

Hack VC Secures One of the Largest Crypto Fund Raises

Hack VC’s third fund is one of the most considerable crypto-focused venture capital raises in 2024.

ParaFi’s $120 million and Lemniscap’s $70 million raise are noteworthy funds.

Accolade, a blockchain fund of funds, recently secured $135 million across two vehicles, while Paradigm announced a $850 million fund, which is substantially smaller than its 2021 offering of $2.5 billion.

However, the cryptocurrency market continues to be at a juncture despite the inflow of new capital into the sector.

The prices of prominent assets such as Bitcoin have stabilized following a brief rally earlier this year, fuelled by the U.S. SEC’s approval of Bitcoin and Ethereum ETFs.

Nevertheless, the industry is still grappling with regulatory uncertainty, and mainstream adoption has been slower than anticipated.

In the second quarter of 2024, crypto startups secured $2.7 billion in financing through 503 deals, as previously reported. This represents a slight increase in capital raised despite a noticeable decrease in deal volume.

During the second quarter, infrastructure firms generated the most funding, with Monad, a parallelization Layer 1 platform, securing $225 million in Series A funding.