Dispersion Capital, an early-stage venture capital firm, has recently emerged from stealth mode and launched a $40 million fund to support startups in building infrastructure for Web3 projects and other decentralized technology ventures.
As per their announcement, Dispersion Capital has already invested in 20 companies, with a majority of them securing follow-on financing.
The firm’s primary objective is to invest in startups that are pushing the boundaries of cutting-edge infrastructure required for a world characterized by multiple chains, currencies, and platforms, with a specific emphasis on Web3 and decentralized platforms.
Dispersion Capital has gained support from prominent organizations such as Ripple, HashKey, Wemade, Circle Ventures, Alchemy Ventures, Cherubic Ventures, Forte, and NGC.
The company’s main focus revolves around expanding the infrastructure supporting Web3 applications. In an interview with TechCrunch, Patrick Chang, the founder of Dispersion Capital, expressed his organization’s ambition to elevate Web3 to a level comparable to cloud computing.
Chang highlighted that the surge of Web3 and nonfungible token-focused companies entering the ecosystem in 2021 exposed the need for stronger infrastructure support. He explained that user onboarding, scalability, and security issues were frustrating for users and newcomers to Web3 due to the immaturity of the infrastructure at that time.
According to their announcement, Dispersion Capital’s sole focus is to fund startups operating in specific layers of Web3, including fintech and gaming infrastructure, security, data, and platforms that challenge traditional industries.
The timing of Dispersion Capital’s official launch is noteworthy. A Cointelegraph report from May 12 stated that crypto venture capitalists closed deals worth $2.6 billion in the first quarter of 2023. However, overall investments were lower than in 2022, with early-stage ventures experiencing a decline of nearly 17% year over year. This downward trend in investments has persisted for four consecutive quarters, and the second quarter of 2023 remains uncertain due to ongoing market volatility.
Despite these challenges, a PitchBook report identifies emerging markets in 2023, such as privacy, data management, and security for Web3 protocols. This suggests that Dispersion Capital could be well-positioned as the sector progresses amidst regulatory uncertainties.