Escape Velocity, a venture capital firm focused on crypto, has announced the successful closing of its second fund, securing $61.74 million to invest in Decentralized Physical Infrastructure Network (DePIN) projects. The fund, which closed in December, aims to bolster the growth of ecosystems centered around DePINs, with a particular emphasis on projects within the solar energy and telescope sectors.
The new fund is over three times the size of Escape Velocity's initial $20 million fund, which was launched in 2022 and saw participation from prominent figures in the venture capital space, including founders of Andreessen Horowitz, Multicoin, and Framework Ventures. This significant increase in capital underscores the growing interest in DePINs and Escape Velocity's strategic focus on this emerging area within the Web3 landscape.
DePINs, which aim to utilize blockchain technology to rebuild traditional infrastructure systems, gained considerable traction early on but experienced a slowdown, impacted by the crypto bear market and a shift in venture capital towards AI. Despite this, Escape Velocity remains a staunch supporter of the sector, with co-founder Mahesh Ramakrishnan expressing optimism about the future and predicting that a major player in the DePIN space will soon achieve mainstream success. Ramakrishnan noted that many DePIN projects launched tokens prematurely, based on hype rather than tangible progress.
Cendana, a fund of funds, emerged as the largest investor in this latest funding round, contributing $15 million. The fund also attracted backing from notable crypto investors, including Marc Andreessen of A16z and Micky Malka of Ribbit Capital. Escape Velocity's investment strategy revolves around "network upgrade themes," seeking to support projects that enhance and expand existing infrastructure using decentralized technologies.
Escape Velocity has already been active in the DePIN space, with investments in solar energy startups like Daylight and Glow made through its first fund. According to their website, the firm is also interested in backing startups involved in AI and Advanced Analytics. This broader focus suggests a vision that integrates DePINs with other cutting-edge technologies to create innovative solutions. The firm's commitment to DePINs comes at a time when the intersection of blockchain and physical infrastructure is gaining renewed attention. By providing capital and support to projects in areas like solar energy and telescopes, Escape Velocity aims to accelerate the development and adoption of decentralized infrastructure networks.
