OP Crypto’s Fund of Funds Initiative

OP Crypto is dedicated to supporting early-stage startups in the digital asset economy. Its primary focus is investing in founders developing innovative business models in the blockchain space. Founded by David Gan, a former Huobi executive, in 2021, OP Crypto views the fund for funds as a boost to the cryptocurrency industry. It serves as a vehicle for diversification, catering to investors actively seeking opportunities in the cryptocurrency space. This initiative is referred to as the OP Fund of Funds I (OP FoF I).

The fund also aims to attract strategic investors seeking to diversify and expand their portfolios internationally. Its investments are targeted at individuals with specialized expertise in niche sectors. OP FoF I focuses on fund management within specific cryptocurrency subsectors, such as decentralized finance (DeFi), NFTs, metaverse, infrastructure, and gaming. Additionally, the fund has a distinct focus on the Asia-Pacific region, with plans to invest in global fund managers located in regions like Southeast Asia, Latin America, India, and Africa. The fund targets emerging fund managers who are relatively inexperienced in managing digital assets below certain financial thresholds. It aims to identify and support these rising stars in the industry.

While not typical in the crypto space, a fund of funds operates as an investment strategy pooling capital to invest in other funds. The goal is to minimize risk by broadening the diversity of investment vehicles under its umbrella.

$100 Million Fundraising to Support Early-Stage Crypto VCs

Despite the declining interest in venture capital and the bearish market sentiment, OP Crypto’s latest fund has already attracted $50 million in commitments. These commitments come from both traditional and crypto-focused limited partnerships (LPs), including major companies such as FTX subsidiary Ledger Prime and investment firm FJ Labs, as it aims for a $100 million hard cap.

David Gan explained that OP Crypto invests both directly and indirectly in fintech and blockchain technologies. OP FoF I is the second fund focused on emerging crypto managers, following their direct investment route through the OP Venture Fund I. Launched in June 2021, the OP Venture Fund raised $50 million and serves as OP Crypto’s flagship venture vehicle, targeting pre-seed and seed-stage projects in the Web 3.0 space. The fund has received support from major institutional investors, including Alan Howard, Bill Ackman, and crypto-native institutions like Galaxy Digital, Animoca Brands, and Digital Currency Group.

Gan mentioned that many institutional investors are uncertain about where to place their funds, and this latest fund offers them a safe entry point into the crypto space. He emphasized that cryptocurrency investments are a long-term prospect, with expectations of more reasonable valuations. The fund is designed to endure over several years, providing exposure through both bull and bear markets, ensuring optimal investments across market cycles.

The “OP” in OP Crypto stands for “open,” “operational,” and “opportunistic.”

The Key Motivations Behind the Fund of Funds Initiative

These core values are what the firm seeks in early-stage crypto companies and what it strives to embody. The firm also enjoys backing from major players such as Huobi, Bybit, Galaxy Vision Hill, Digital Currency Group, and Republic.

Lucas He, OP Crypto’s Chief Operating Officer (COO) and head of research, is the general partner of the fund. Like David Gan, Lucas He previously worked at Huobi, where they were involved in the first seed rounds of companies like Dragonfly Capital, 1kx, and Multicoin Capital. David Gan serves as the president and advisor to the fund.

Their combined experience gives OP Crypto deep insights into CeFi, DeFi, and TradeFi, enabling them to understand institutional fund needs and expectations.

CryptoChipy reported that OP Crypto follows a disciplined risk management approach, investing cautiously and gradually. It deployed only 20% of its total operating capital in the previous year. According to CryptoChipy, OP Crypto Venture Capital is poised to develop the next big crypto firm, such as Kucoin, FTX, Coinbase, and Binance.