Presented by CIBC Innovation Banking

One of the largest blockchain fund of funds has raised over $135 million across two new vehicles

September 12, 2024

’Allo! Leo Schwartz here, reporting in Allie’s stead today.

Crypto may paint itself as an industry of lone wolves and iconoclasts, but its promise of riches (and sure, disruptive technology) has attracted some of the world’s biggest capital allocators, from sovereign wealth funds to endowments. And despite the turmoil of the past three years, the money continues to pour in, with major VCs from Paradigm to Polychain continuing to raise massive new funds.

Another institutional mainstay in the digital asset space is joining the crowd of venture firms with fresh powder: the Washington, D.C..-based Accolade Partners, a fund of funds that has operated in blockchain since 2018. According to documents filed with the Securities and Exchange Commission last month, Accolade has raised just over $135 million across two blockchain vehicles. The firm declined to comment, suggesting that it is continuing to market—and raise—for the funds, which are shaping up to be some of the largest raised in the sector this year.

While Accolade may not have the public cachet of crypto VCs like Haun Ventures and a16z crypto, it has served a critical role as a funding source for blockchain’s top investors. Accolade’s website lists a who’s who of the blockchain venture space, from “degen”-leaning firms such as Framework to more conventional outfits such as Electric Capital, which is run by a former Y Combinator partner and Facebook director.

Founded by venture capital vet Joelle Kayden in 2000, Accolade made its first blockchain investment into a16z’s first crypto fund in 2018. “The blockchain manager universe today reminds us of the venture manager universe in the late ’80s or early ’90s,” the firm wrote in a Medium post in 2020. “If a fund of funds had constructed a portfolio of the best names of that era, it would have backed the early funds of Sequoia, Benchmark, or Kleiner Perkins.”

Given crypto’s explosion the following year, the approach proved to be a prescient bet, with Accolade doubling down on blockchain through a second fund in August 2021—just before Bitcoin hit its then-peak. One of the firm’s partners told the Wall Street Journal that some of the crypto funds it had backed were returning 10 times or more capital invested than its traditional bets.

Accolade has continued to actively invest in VC firms through crypto’s so-called winter, including backing the $75 million fund for 1kx in early 2024 and a $70 million fund for web3 investor Lemniscap over the summer.

Crypto may still carry the stain of high-profile collapses such as FTX, but deal activity has continued to heat up as top digital assets like Bitcoin and Ethereum have recovered. According to a report published by Pitchbook in August, fundraising increased in the second quarter of 2024, with startups clearing $2.7 billion across 503 deals.

The documents filed by Accolade show the new funding split over two vehicles—one named “Blockchain III Venture” and the other named “Blockchain III Seed,” though it is unclear whether the firm will deviate from its previous strategy of investing in the sector’s largest managers. Its previous funds have not included the distinction in its filings.

Blockchain is not the only area where Accolade has kept busy. In February, it announced over $1 billion raised for three funds of funds in the growth and venture sectors. But as the crypto industry seeks to find its footing between the rebels and the institutions, Accolade is ready to make more bets.

See you tomorrow,

Leo Schwartz
Twitter: @leomschwartz
Email: leo.schwartz@fortune.com
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Nina Ajemian curated the deals section of today’s newsletter.

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VENTURE DEALS

- Candid Therapeutics, a San Diego, Calif.-based immunological disease treatment biotech company, raised $370 million in funding. Venrock Healthcare Capital Partners, Fairmount, TCGX, and venBio Partners led the round and were joined by Foresite Capital, Third Rock Ventures, Fidelity Management & Research Company, and others.

- Glean, a Palo Alto, Calif.-based work AI platform, raised $260 million in Series E funding. Altimeter and DST Global led the round and were joined by Craft Ventures, Sapphire Ventures, and SoftBank Vision Fund 2 and existing investors Coatue, General Catalyst, ICONIQ Growth, and others.

- Form3, a London, England-based account-to-account payment platform, raised $60 million in a Series C extension from British Patient Capital, Visa, and others.

- Connectly, a San Francisco, Calif.-based conversational AI platform, raised $20 million in Series B funding. Alibaba led the round and was joined by Unusual Ventures, Volpe Capital, RX Ventures, and others.

- Datricks, a Tel Aviv, Israel-based AI-powered automated risk mining solution for financial teams, raised $15 million in Series A funding. Team8 led the round and was joined by SAP and existing investor Jerusalem Venture Partners.

- Landbase, a San Francisco, Calif.-based agentic AI go-to-market platform, raised $12.5 million in seed funding. A*, 8VC, and First Minute Capital led the round and were joined by Inovia Capital, Picus, and General Catalyst.

- Operant AI, a San Francisco, Calif.-based runtime AI application protection platform, raised $10 million in Series A funding. SineWave Ventures and Felicis led the round and were joined by Alumni Ventures, Massive, Calm Ventures, Gaingels, angels, and others.

- Nostra AI, a New York City-based conversion optimization software company for e-commerce brands, raised $8.9 million in funding. High Alpha led the round and was joined by Signal Peak Ventures, Sugar Capital, Crosscut, angel investors, and others.

- Brico, a San Francisco, Calif.-based SaaS financial licensing platform for financial institutions and fintechs, raised $8.1 million in seed funding. Pear VC led the round and was joined by Flourish Ventures, Cambrian Ventures, and Restive Ventures.

- Circe, a Boston, Mass.-based carbon-negative manufacturing company, raised $5 million in seed funding from ReGen Ventures, Undeterred Capital, Ponderosa Ventures, and others.

- Realm.Security, a Boston, Mass.-based security fabric cybersecurity company, raised $5 million in seed funding from Accomplice and Glasswing Ventures.

- Vind AI, an Oslo, Norway-based wind park design AI platform, raised €3 million ($3.3 million) in seed funding. Norrsken VC led the round and was joined by Spacemaker founders, Arkwright X, and employees.

- Low Observable Technology, a London, England-based digital asset trading firm, raised $1.6 million in seed funding. Lightspeed Faction led the round and was joined by Blockchain Coinvestors and Chris Adelsbach.

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PRIVATE EQUITY

- ARCHIMED took Jeisys Medical, a Seoul, South Korea-based skincare energy-based devices developer, private for 990 billion won ($738.5 million).

- Argentum acquired a minority stake in L2 Aviation, a Dripping Springs, Texas-based avionics services provider. Financial terms were not disclosed.

- Coalesce Capital agreed to acquire Miller Environmental Group, a Calverton, N.Y.-based waste, industrial, and environmental services provider. Financial terms were not disclosed.

- LGT Capital Partners acquired a minority stake in H&MV Engineering, a Limerick, Ireland-based high voltage electrical engineering and design provider for data centers and renewables. Financial terms were not disclosed.

- Renovus Capital Partners acquired QualX, a Springfield, Va.-based records and information management, digital transformation, and business process improvement services provider to federal government agencies. Financial terms were not disclosed.

- Shamrock Capital acquired a majority stake in Nth Degree, an Atlanta, Ga.-based event management and experiential marketing company. Financial terms were not disclosed.

OTHER

- ColorTokens acquired PureID, a Royston, England-based secure identity and access management provider. Financial terms were not disclosed.

FUNDS + FUNDS OF FUNDS

- Fika Ventures, a Los Angeles, Calif.-based venture capital firm, raised $160 million for its fourth fund focused on B2B technology companies in vertical SaaS, fintech, AI, and other sectors.

PEOPLE

- Asymmetric Capital Partners, a Boston, Mass.-based venture capital firm, promoted Nancy Chou to partner and Matty Mejia-Johnston to principal.

- Dell Technologies Capital, the Palo Alto, Calif.-based venture capital arm of Dell Technologies, added Nina Lu as a principal. Previously, she was at BDT & MSD Partners.

- Prudence, a New York City-based venture capital firm, promoted Melissa Landry Koller to chief operating officer and hired Tony Rosenberg as senior associate. Previously, Rosenberg was at Blackstone.

- Sixth Street Capital, a San Francisco, Calif.-based investment firm, added Josh Empson as a partner. Previously, he was at Providence Equity Partners.

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A fund of funds goes big on Blockchain