NFX Launches New Venture Fund

NFX, an early-stage venture firm with billion-dollar companies like Lyft +2.3 percent, Doordash, Patreon, and Poshmark among its portfolio, announced the launch of a new venture fund today. NFX previously raised $150 million in 2017 for its first fund and $275 million in 2019 for Fund II.

Fund III, like its predecessors, will focus solely on seed and pre-seed stage startups, with a goal of adding about 70 new companies to the portfolio.

Morgan Beller, a general partner at NFX and a former partner at Andreessen Horowitz, one of the most active venture firms in the space, will lead the crypto investments. Beller is best known for co-creating Facebook’s cryptocurrency project Libra, which was later rebranded as Diem. Beller joined NFX last year to help the company’s crypto expertise, but she continues to advise Facebook’s projects.

Since her arrival, NFX has led investments in companies like Radicle, a decentralized platform for coding collaboration that bills itself as “PayPal PYPL +1.5 percent for crypto,” and Eternal, an NFT marketplace that specializes in trading Twitch streamer clips.

Other venture capital giants betting on the $2 trillion market, including her former employer Andreessen Horowitz, which recently closed a $2.2 billion crypto fund, contrast NFX’s acute focus on early-stage investments. Although these firms also make seed investments, they frequently lead large rounds of more mature crypto companies with established businesses that generate significant revenue. The most recent example is Sky Mavis, the creator of Axie Infinity, who raised $150 million in a Series B led by Andreessen at a $3 billion valuation. The announcement was made today, with daily transactions totaling $33 million and a total volume of over $2 billion.

NFX, on the other hand, wants to help founders get their ideas “from 0 to 1,” as early Facebook investor and billionaire Peter Thiel put it. In fact, Beller’s departure from Facebook in September was prompted by this method, she told Forbes in an earlier interview, adding that Diem and Novi, the accompanying digital wallet on which she had also worked, were “past that point.” Despite the fact that both initiatives were expected to launch in the first half of 2020, they have been scrutinized by concerned regulators around the world and neither has yet reached the market.