Singapore's Mooncake Capital launches $100m crypto VC fund
Mooncake Capital, a Singapore-based venture capital firm focused on crypto technologies has launched an Asia-focused fund targeting $100 million.
It has raised $10 million to date and will deploy primarily in China, Hong Kong and Singapore. The aim is to provide Asian crypto industry exposure to investors in regions including Latin American and Europe. A significant number of Southeast Asian investors are also expected to contribute.
“The Connect Fund is open to anyone, but we are getting extensive interest from Indonesia,” Patrick Lee, a partner at Mooncake, said in a statement. “With the China-US trade war already dropping the rupiah 2% since last month and Bappebti now recognizing cryptocurrency as a commodity, investor sentiment has picked up dramatically for cryptocurrency.”
Mooncake specializes in early-stage token investments in China and claims to have a deep network in the country able to access “tier-one” projects. Lee describes the Chinese crypto space as unforgiving to unconnected investors, with severe challenges around scams. This has been complicated by a decision by China’s central bank to illegalize initial coin offerings (ICO).
The VC firm nevertheless sees an active token market in this environment, where ICOs have been rebranded IEOs, or initial exchange offerings. IEOs are not banned from exchanges and said to be receiving substantial investor interest. They allow fiat-to-crypto transactions to be conducted on an over-the-counter basis via Wechat groups or specialized platforms.
“Among [Indonesian] investors, most of our client requests are for investing in Chinese crypto projects,” Lee added. “It makes sense too. China is quite close to Indonesia thus it’s not a total black box in terms of culture. But when it comes to navigating the Wechat-laden investment circles deep in the smoky rooms of Beijing, things are murky for outsiders. Which is where we come in.”
Momentum in crypto-related fundraising has coincided with a rapid rise in ICO and other token sale activity beyond the scope of traditional seed-stage equity investment. This has also led to greater regulatory oversight and fraud concerns. These concerns are related to the assets’ inherent properties of anonymity and the reputation of ICOs to raise large sums for highly speculative companies. VC has played a leading role in integrating the technology into the traditional financial sector.
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