Overview – Fabric Ventures

Name:

Fabric Ventures

Type:

Venture capital firm

Sector:

Web3, blockchain, decentralised technologies

Business Overview:

• Fabric Ventures is a VC firm that invests in early-stage startups that are building the open web, or Web3. Web3 is a vision of the internet that is more decentralised, participatory, and empowering for individuals. Fabric Ventures supports founders who are creating new forms of network, digital organisations, and protocols that harness the talents of individuals for the benefit of the collective1.

Proposition:

• Fabric Ventures offers more than just capital to its portfolio companies. It also provides access to a network of experts, advisors, and partners who can help with technical, legal, and operational challenges. Fabric Ventures also organises events, workshops, and forums to foster a community of open web contributors and enthusiasts.

Elevator Pitch:

• Fabric Ventures is the VC firm for the open web. We back visionary founders who are building organisations and institutions for individuals, by individuals. We believe in the power of individual contribution and collaboration in shaping a more decentralised and innovative future.

Business health

• Summarise financial activity over time: Fabric Ventures has raised three funds since its inception in 2012. The first fund, called Firestartr, was launched in 2012 and raised $20 million. The second fund, called Fabric I, was launched in 2017 and raised $42 million. The third fund, called Fabric II, was launched in 2020 and raised $130 million3. According to Crunchbase, Fabric Ventures has invested in 46 companies as of October 2023, with a total disclosed funding amount of $1.4 billion4. Some of its notable portfolio companies include Polkadot, Sorare, Near, Immutable, Nansen, and Ramp.
• Company structure: Fabric Ventures is led by four partners: Richard Muirhead (Managing Partner), Max Mersch (Partner), Anil Hansjee (General Partner), and Dr Steven “7” Waterhouse (CTO & Venture Partner). The firm also has six investment team members, seven advisors and experts, and twelve portfolio services staff.
• Management changes: There have been no major management changes at Fabric Ventures in the past year. However, the firm has added two new venture partners in 2023: Alain Falys and Christina Frankopan. Alain Falys is the co-founder and chairman of Yoyo Wallet, a mobile payment and loyalty platform. Christina Frankopan is the founder and CEO of Graffam Group, a strategic advisory firm for family offices.
• Acquisitions: Fabric Ventures has not acquired any other companies or funds in its history. However, some of its portfolio companies have been acquired by larger players in the Web3 space. For example, in 2021, Coinbase acquired Bison Trails, a blockchain infrastructure platform that Fabric Ventures invested in since 20195. In 2020, ConsenSys acquired Quorum, an enterprise blockchain platform that Fabric Ventures invested in since 2017.

Market analysis

• Fabric Ventures’ target market is the global Web3 and blockchain ecosystem, which consists of startups, developers, users, and investors who are interested in building and using decentralised applications and protocols. Fabric Ventures’ customer segments are the early-stage startups that are creating innovative solutions for the open web, such as new forms of network, digital organisations, and protocols. Fabric Ventures focuses on investing in startups that have a clear vision, a strong team, a scalable technology, and a large market opportunity.

Market size, growth, and trends:

• The Web3 and blockchain market is a rapidly growing and evolving sector that has the potential to disrupt various industries and domains. According to a report by PwC, the global blockchain market size is expected to grow from $3 billion in 2020 to $39.7 billion by 2025, at a compound annual growth rate (CAGR) of 67.3%. The report also identifies some of the key drivers and trends for the blockchain market, such as increasing adoption of digital assets, rising demand for decentralised finance (DeFi), growing interest in non-fungible tokens (NFTs), and emerging use cases for Web3 technologies.

Competitive landscape and positioning:

• Fabric Ventures is one of the leading VC firms in the Web3 and blockchain space, with a strong track record of investing in successful projects and companies. Some of its main competitors are Andreessen Horowitz (a16z), Polychain Capital, Paradigm, Placeholder, Pantera Capital, and Union Square Ventures. Fabric Ventures differentiates itself from its competitors by having a deep technical expertise, a global network of partners and advisors, and a community-driven approach to investing. Fabric Ventures also has a unique thesis of backing founders who are building organisations and institutions for individuals, by individuals.

Landscape

Company	Sector	Proposition	Funding	Services
A16z	Venture capital	A16z is a venture capital firm that invests in crypto networks and platforms that are creating new ways of organizing human activity and value exchange. A16z believes in the power of crypto to enable trustless coordination and cooperation at scale.	A16z has raised $2.2B for its third crypto fund in 2021. Its portfolio includes projects such as Coinbase, Dapper Labs, OpenSea, and Uniswap.	A16z offers funding, research, and engineering support to its portfolio companies and crypto protocols.
Polychain Capital	Venture capital	Polychain Capital is a venture capital firm that invests in crypto protocols and platforms that are building the decentralized infrastructure and applications for the future of the internet. Polychain Capital believes in the power of crypto to create a more open, fair, and resilient web.	Polychain Capital has raised $1.5B for its second fund in 2021. Its portfolio includes projects such as Compound, MakerDAO, Filecoin, and Tezos.	Polychain Capital offers funding, strategy, and ecosystem support to its portfolio companies and crypto protocols.
Electric Capital	Venture capital	Electric Capital is a venture capital firm that invests in cryptocurrencies, blockchain-based applications, fintech, and marketplaces. Electric Capital believes in the power of software to create new forms of value and transform the world.	Electric Capital has raised $260M for its second fund in 2021. Its portfolio includes projects such as Celo, Compound, Bitwise, and NEAR Protocol.	Electric Capital offers funding, community, and technical support to its portfolio companies and crypto developers.
Paradigm	Venture capital	Paradigm is a venture capital firm that invests in crypto protocols and platforms that are creating new ways of organizing human activity and value exchange. Paradigm believes in the power of crypto to enable trustless coordination and cooperation at scale.	Paradigm has raised $2.5B for its third fund in 2022. Its portfolio includes projects such as Uniswap, MakerDAO, Compound, and Optimism.	Paradigm offers funding, research, and engineering support to its portfolio companies and crypto protocols.
[Multicoin Capital]	Venture capital	Multicoin Capital is a venture capital firm that invests in crypto networks and companies that are building the foundation for the future of the internet. Multicoin Capital believes in the power of crypto to democratize access to information, wealth, and opportunity.	Multicoin Capital has raised $100M for its second fund in 2020. Its portfolio includes projects such as Solana, Helium, The Graph, and THORChain.	Multicoin Capital offers funding, analysis, and network support to its portfolio companies and crypto networks.
CoinFund	Venture capital	CoinFund is a venture capital firm that invests in Web3 projects that are enabling new forms of collaboration and value creation across various domains such as media, gaming, art, and social networks. CoinFund believes in the power of Web3 to foster more inclusive, participatory, and creative communities.	CoinFund has raised $83M for its third fund in 2021. Its portfolio includes projects such as Rarible, Flow, Balancer, and Livepeer.	CoinFund offers funding, community, and product support to its portfolio companies and Web3 creators.
Framework Ventures	Venture capital	Framework Ventures is a venture capital firm that invests in decentralized finance (DeFi) projects that are creating new financial primitives and services for the crypto economy. Framework Ventures believes in the power of DeFi to democratize finance and create more open, accessible, and efficient markets.	Framework Ventures has raised $100M for its second fund in 2020. Its portfolio includes projects such as Chainlink, Synthetix, Aave, and Yearn Finance.	Framework Ventures offers funding, research, and growth support to its portfolio companies and DeFi projects.
Notation Capital	Venture capital	Notation Capital is a venture capital firm that invests in early-stage Web3 projects that are building the decentralized web and the open data economy. Notation Capital believes in the power of Web3 to enable more transparent, fair, and efficient markets and systems.	Notation Capital has raised $27M for its third fund in 2020. Its portfolio includes projects such as Livepeer, Filecoin, NuCypher, and 3Box.	Notation Capital offers funding, mentorship, and operational support to its portfolio companies and Web3 founders.
Variant Fund	Venture capital	Variant Fund is a venture capital firm that invests in crypto networks that are building the ownership economy where users are owners and creators are rewarded. Variant Fund believes in the power of crypto to align incentives between users and platforms and unlock network effects at scale.	Variant Fund has raised $15M for its first fund in 2020. Its portfolio includes projects such as Uniswap, Compound, PoolTogether, and Rally.	Variant Fund offers funding, strategy, and governance support to its portfolio companies and crypto networks.
[1confirmation]	Venture capital	1confirmation is a venture capital firm that invests in early-stage crypto projects that are creating new ways of organizing human activity and value exchange. 1confirmation believes in the power of crypto to enable permissionless innovation and collaboration.	1confirmation has raised $125M for its third fund in 2021. Its portfolio includes projects such as MakerDAO, dYdX, Zcash, and Dharma.	1confirmation offers funding, network, and platform support to its portfolio companies and crypto projects.

Opportunities and challenges:

• Fabric Ventures has many opportunities to leverage its position and reputation in the Web3 and blockchain market. Some of these opportunities are:
  • Expanding its portfolio to include more diverse and innovative projects and sectors, such as gaming, social media, identity, governance, etc.
  • Increasing its involvement and influence in the Web3 community and ecosystem, such as organising events, workshops, forums, etc.
  • Partnering with other VC firms, corporates, governments, and organisations to promote the adoption and development of Web3 technologies
  • Supporting its portfolio companies with scaling, fundraising, legal, regulatory, and operational challenges However, Fabric Ventures also faces some challenges in the Web3 and blockchain market. Some of these challenges are:
  • Dealing with the high volatility and uncertainty of the crypto market
  • Keeping up with the fast pace and complexity of technological innovation and change
  • Managing the risks and trade-offs of investing in early-stage startups
  • Balancing the interests and expectations of its investors, portfolio companies, and community members

SWOT analysis

• Strengths:
  • A proven track record of investing in successful Web3 projects and companies
  • A deep technical expertise and understanding of Web3 technologies
  • A global network of experts, advisors, and partners who can provide support and guidance
  • A community-driven approach to investing that fosters collaboration and participation
• Weaknesses:
  • A relatively small fund size compared to some of its competitors
  • A limited geographic presence and reach outside Europe
  • A lack of diversity and inclusion in its team and portfolio
  • A dependence on the crypto market conditions and sentiment
• Opportunities:
  • Expanding its portfolio to include more diverse and innovative projects and sectors
  • Increasing its involvement and influence in the Web3 community and ecosystem
  • Partnering with other VC firms, corporates, governments, and organisations
  • Supporting its portfolio companies with scaling, fundraising, legal, regulatory, and operational challenges
• Threats:
  • The high volatility and uncertainty of the crypto market
  • The fast pace and complexity of technological innovation and change
  • The risks and trade-offs of investing in early-stage startups
  • The interests and expectations of its investors, portfolio companies, and community members

Recommendations:

• Raising more funds to increase its capital base and competitiveness
• Expanding its geographic presence and reach to other regions, such as Asia and North America
• Increasing its diversity and inclusion efforts in its team and portfolio
• Developing a more robust risk management and mitigation strategy
• Strengthening its value proposition and differentiation from its competitors

Conclusion

• Fabric Ventures is a VC firm that invests in early-stage startups that are building the open web, or Web3. Web3 is a vision of the internet that is more decentralised, participatory, and empowering for individuals. Fabric Ventures supports founders who are creating new forms of network, digital organisations, and protocols that harness the talents of individuals for the benefit of the collective.
• Fabric Ventures has a proven track record of investing in successful Web3 projects and companies, such as Polkadot, Sorare, Near, Immutable, Nansen, and Ramp. It also has a deep technical expertise and understanding of Web3 technologies, a global network of experts, advisors, and partners, and a community-driven approach to investing.
• Fabric Ventures operates in a rapidly growing and evolving market that has the potential to disrupt various industries and domains. The global blockchain market size is expected to grow from $3 billion in 2020 to $39.7 billion by 2025, at a CAGR of 67.3%. The market is driven by increasing adoption of digital assets, rising demand for DeFi, growing interest in NFTs, and emerging use cases for Web3 technologies.
• Fabric Ventures faces some challenges and risks in the Web3 and blockchain market, such as high volatility and uncertainty, fast pace and complexity of innovation and change, trade-offs of investing in early-stage startups, and balancing the interests and expectations of its stakeholders. However, it also has many opportunities to leverage its position and reputation in the market, such as expanding its portfolio to include more diverse and innovative projects and sectors, increasing its involvement and influence in the Web3 community and ecosystem, partnering with other VC firms, corporates, governments, and organisations, and supporting its portfolio companies with scaling, fundraising, legal, regulatory, and operational challenges.
• Based on the SWOT analysis above, some of the recommendations for Fabric Ventures are:
  • Raising more funds to increase its capital base and competitiveness
  • Expanding its geographic presence and reach to other regions, such as Asia and North America
  • Increasing its diversity and inclusion efforts in its team and portfolio
  • Developing a more robust risk management and mitigation strategy
  • Strengthening its value proposition and differentiation from its competitor