Deal Box, a capital markets advisory and token offering packaging platform, has launched its venture capital arm with plans to invest $125 million in startups using web3 technology, the company said on Wednesday.
"We believe in the transformative power of web3, and we plan to invest in web3 startups and companies that use web3 technologies, including blockchain, to impact and reshape people's everyday lives," Deal Box CEO Thomas Carter told.
Founded in 2005, Deal Box has a combined transaction volume of more than $200 million and more than 500 packaged clients, according to its website. It works with investment and digital asset-focused businesses such as Tezos, Vertalo, tZERO, Texture Capital, Fundopolis, and Resolute Capital Partners, among others.
Venture capital arm Deal Box Ventures will focus on startups in five fund sectors: emerging growth, real estate, fintech, social impact and so-called "FunTech," which will look at "extreme sports, innovative leisure and experiential consumer products." Changing the way we rest and play," the company said.
“In terms of FunTech, we know that football, football and basketball teams have become behemoths in terms of team valuation,” Carter said. "There are a lot of opportunities for consolidation in the extreme sports space and the potential is huge. This is a remarkable time for these extreme sports categories as they become institutionalized and gain more recognition."
Carter added that for the fintech category, artificial intelligence and blockchain will be the fastest path to creating enterprise value. Each fund totaled $25 million, for a combined $125 million across the five funds, Carter said. "This will be an achievable goal for each fund to raise capital, and then we will launch larger funds." Carter added that this amount is "the best basis for achieving the results we want to achieve in the next three to five years. ".
Carter shared that Deal Box receives strategic institutional funding from family offices, high-net-worth and ultra-high-net-worth individuals. Institutional investors, other family offices and sovereign wealth funds are also interested, Carter added. "So far, we've brought in just under $5 million in revenue and are getting closer to $40 million."
As part of its web3 investment theme, the firm has closed initial strategic investments in three startups - Total Network Services, Rypplzz and Forward-Edge AI.
The resilience of web3 companies that have survived the recent downturn should show that they are "doing something meaningful to meet a real need in the market and hopefully making good decisions," Carter said. Many projects in the web3 space are speculative, but Deal Box wants to show investors and founders that blockchain and web3 technology can be used while the SEC “still works within its boundaries.”
