Ledger partners with Cathay Innovation on $110M crypto fund

Crypto hardware wallet startup Ledger is teaming up with VC firm Cathay Innovation to launch a €100 million ($110 million) crypto fund.

Why it matters: Despite the recent downturn, institutional capital still wants to invest in web3 startups and partner with crypto-native companies to find the best opportunities.

Driving the news: The new fund, called Ledger Cathay Capital, will be led by Cathay Innovation’s Denis Barrier and Ledger’s Pascal Gauthier and Michael Louzado.

• Under the partnership, Cathay Innovation brings the investment chops, while Ledger will bring deal flow and expertise to help with due diligence in the market.
• The fund will focus on seed and Series A investments and will both lead and co-invest in web3 startups, depending on the opportunity, Barrier says.

Ledger is best known for its hardware crypto wallet, but in recent years it went open source so that other companies might code their decentralized apps to work with its platform.

• That gave it visibility into what many blockchain and app designers were doing in the space, but it also led to many firms asking Ledger for investment, according to Gauthier.
• “We thought it would be important to build this ecosystem fund around ledger so we could help the industry not only with security but also with cash for projects that we think are the best in industry,” he says.

Of note: Cathay Innovation has been an investor in Ledger for the past five years, including the company’s most recent Series C funding round.

• The VC firm is no stranger to partnering to invest in specific industries, having previously launched the C. Entrepreneurs insurtech fund with BNP Paribas Cardif, the Cathay Smart Energy climate tech fund with Total, and the Cathay CarTech & Mobility fund with Valeo.

• French investment bank Bpifrance — another longtime Ledger backer — is an LP in the new fund.

The big picture: Corporate venture capital is nothing new in crypto, where companies like Coinbase, FTX, Binance and Uniswap have all launched their own investment arms over the years.

• The market has been maturing, however, and is attracting outside LPs looking to leverage the expertise and network of companies in the market to help direct their investments.
• One example of this is Binance Labs, which recently took outside LP money for the first time when it launched its $500 million crypto fund.