Thursday 29 July 2021 2:49 pm

'Open economy' backers Fabric Ventures announces $130m fund

A venture manager that backs ‘open economy’ founders, has today announced a new 2021 fund worth $130m (£93m) – the biggest of its type in Europe.

The fund is backed by $30m from the European Investment Fund (EIF) and its partners include Niklas Zennstrom’s venture firm Atomico, Mike Novogratz’s Galaxy Digital, DCG and the founders of Ethereum, Wise, and MySQL.

The fund is the first EIF-backed fund specifically mandated to invest in digital assets.

It will back both traditional equity and the software tokens and other digital assets native to these new, inclusive and collaborative networks and applications. These are all underpinned by the recent invention of digital scarcity and hence ownership.

The founders of the open economy frequently have the explicit objective of delivering solutions to many of humanity’s most fundamental challenges, Fabric Ventures said in a statement.

Unlike the ‘closed economy’ digital platforms which, Febric Ventures said are “optimised to trap data and power centrally in the pursuit of profitability,” new technologies associated with the open web, including digital assets and blockchain, facilitate an ‘open economy’ supporting the `’free flow of users, identity, data, and value”.

Unlike the ‘closed economy’ digital platforms which, Febric Ventures said, are “optimised to trap data and power centrally in the pursuit of profitability,” new technologies associated with the open web, like digital assets and blockchain, facilitate an ‘open economy’ supporting the “free flow of users, identity, data, and value”.

The venture manager described the open economy as “an upgrade to capitalism” because it facilitates “greater overall economic returns for all participants, and ultimately a fairer, more stable and sustainable society.”

The venture manager, with offices in both London and Luxembourg, backs open economy founders and focusses on being the “first institutional cheque” invested in companies, crypto assets and digital networks.

Since being set up in 2012 Febric Ventures has built companies over $3bn in value, it says.

It has an existing fund of ‘open economy’ projects from 2017, which covers software infrastructure, finance and media projects – and has a combined value of $42bn. The new fund, it said, will follow in the same footsteps.

The fund is also invested in by 42 partners, executives, contributors and founders from the open web community.

“Fabric’s new fund will be put to work partnering with the most daring and relentless entrepreneurs of the open economy on their journey to architect lasting protocols and platforms, not simply companies,” said Richard Muirhead, co-founder and managing partner at Fabric Ventures, which was previously known as Firestartr. 

“It is now well acknowledged that there is a need for a web that is user-owned and, consequently, more human-centric. There are astonishing people crafting this digital fabric for the benefit of all. We are excited to support those people with our latest fund.”

EIF chief executive Alain Godard said “deeptech entrepreneurs in the blockchain sector in Europe often struggle to find financial support and investors that have a deep understanding of their space. This partnership seeks to address that need and unlock financing opportunities for entrepreneurs active in the field of blockchain technologies – a field of particular strategic importance for the EU and our competitiveness on the global stage.”

Fabric Ventures Group is registered as an AIFM with the CSSF in Luxembourg and includes an advisor entity which has been made an appointed representative in the UK.

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