This Leading Investment Firm Is Betting High On Israeli Crypto Startups, Here’s Why

Valkyrie, a leading firm in asset management, per CoinDesk, has announced today that it’s entering into the venture capital asset class. The firm best known for its SEC-approved futures ETFs hired famed investor Lluis Pedragosa in April as a managing partner of the new venture.

Investing in the middleware layer

Lluis Pedragosa, a former Managing Partner and CFO of Team8, a cybersecurity, fintech, and enterprise software company creation platform, and has worked in the industry for over 10 years investing in the US and Israel. He invested in Israeli crypto startup Curv in 2018, which is now owned by PayPal.

Now, three months after joining Valkyrie, he explains what the fund is all about, sharing that it’s not your typical crypto VC fund. Pedragosa relayed that he is in talks with foreign investors, including institutions and high-net-worth individuals, to raise $25 million to $30 million for the fund,

The idea for us is that we want to invest in what’s called the middleware layer, which is something like the infrastructure layer — everything that lies between an application and the layer 1 protocols, and what we call Web 2.5, said Pedrogosa.

With his partnership with Valkyrie, Pedragosa hopes to utilize the company’s in-house technical expertise for due diligence processes. He added that Valkyrie’s already established network in the crypto space could be beneficial for founders as the firm can help launch on their behalf.

Why focus on Israeli crypto startups?

In an interview with CoinDesk, Pedragosa explains that Israel’s crypto startup scene has been languishing in a “vacuum” and that even with the country’s budding tech entrepreneur landscape, founders and builders were all avoiding crypto. He faulted this on the bad taste left by ICO scams of 2017 and 2018.

Pedragosa also shared that he will write checks ranging from $250,000 to $1 million per company, but investment size may vary by region.

In the US, I think you can write smaller checks… But in Israel, you have to be more focused on the bets you’re making because maybe the exits aren’t that big, Pedragosa said.