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Scoop: Valor Capital eyes $500M for two new funds

Illustration of the Brazilian flag altered so the yellow diamond is shaped like an upward trend line

Illustration: Annelise Capossela/Axios

Valor Capital, an early investor in Coinbase, has told LPs that it plans to raise about $500 million for its next pair of funds, a source with knowledge of the matter says.

Why it matters: The firm, co-founded by the former U.S. ambassador to Brazil, has historically spent about 40% of its allocation on fintech bets.

Driving the news: Focusing on companies that touch, or are based in, Latin America, Valor Capital is expected to seek roughly $250 million for its fifth early-stage fund and another $250 million for its third opportunity fund.

Context: Valor raised about $200 million for its previous opportunity fund and $250 million for its fourth early-stage fund.

The big picture: "We're going into a time where we think fintech is going to be really interesting," Valor partner Michael Nicklas said Tuesday on the sidelines of the firm's 11th annual summit.

  • Nicklas is bullish on enterprise crypto companies in Brazil, where the government has embraced fintech.
  • He believes a new raft of companies and services will be built around Brazil's planned launch of a central bank digital currency. "It will be much more programmable," he added.
  • Instead of involving a third party to hold capital in escrow during a transaction, Nicklas suggested, why not program the conditions straight into a smart contract on a blockchain?
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