L1 Digital AG (L1D), a Zurich-based investment advisor focused on digital assets, has raised $152 million for its second venture capital fund. According to L1D CEO Ray Hindi, the firm will invest 70% of the funds directly into crypto startups and the other 30% into early-stage crypto-focused investment firms. L1D is registered with FINMA, Switzerland’s independent financial markets regulator, and has already deployed about one-third of its capital.
We’re most active during bear markets, said Hindi. The second benefit of investing in bear markets is to de-risk operations. In bear markets, competition is pretty low, typically.
L1D’s investments have included institutional credit ecosystem Centrifuge, blockchain developer platform Chroma, crypto custodian Safe, decentralized exchange aggregator Li.Fi and treasury management startup Squads. The average check size for direct investments is between $1.5 million and $7 million per project.
Our thesis is really that the [crypto] space will mature as time goes on, said L1D investment researcher Jake Lynch. He noted that potential areas of strength coming out of the bear market could include security or user interface improvements. We’re long-term bullish here, Lynch said.