Crypto Venture Firm Shima Capital Debuts New $200M Web3 Fund

The new fund will focus on private tokens and early-stage investments in crypto startups.
Image source: Shima Capital

Quick take:

  • Shima Capital’s limited partners include Dragonfly, Animoca, former US presidential candidate Andrew Yang, and hedge fund billionaire Bill Ackman.
  • Shima plans to incubate a number of portfolio companies.
  • The fund also aims to invest in debt-to-equity convertible notes in promising startups.

Shima Capital has raised $200 million for its first venture fund, which debuted on the same day as CoinFund launched its $300 million Web3 fund, further indicating investor confidence in the space despite a crypto downturn.

The venture fund will focus on pre-seed and seed stage startups as well as private tokens. Founded by Yida Gao, a Forbes 30 Under 30 venture capitalist, Shima Capital has attracted big-name limited partners including the newly rebranded crypto-focused venture firm, Dragonfly, hedge fund billionaire Bill Ackman, former US presidential candidate Andrew Yang, Animoca Brands, OKex, and Republic Capital.

Besides investing in early-stage startups and private tokens, Shima Capital Fund I also aims to invest in debt-to-equity convertible notes in promising startups.

Gao previously founded crypto hedge fund firm Divergence Digital Capital (DDC) and left the firm at the end of Q1 2021 to set up Shima Capital. Prior to founding DCC, Gao was the general partner of Los Angeles-based venture firm Struck Capital.

According to Blockworks, the new fund demanded a minimum of $1 million for institutional investors, with some putting in $5 to $10 million. 

The fund will cover a range of verticals ranging from decentralised identity, Web3 social media and blockchain gaming to blockchain technology like zero-knowledge rollups. Each company will receive an investment ranging from $500,000 to $2 million.

“We see a pocket of opportunity that’s missing in the capital stack for Web3 in being the first institutional capital in the pre-seed,” Gao told Blockworks. 

Speaking to Coindesk, Gao said that more than half of Shima’s team is dedicated to post-investment operational support services such as engineer recruiting, community marketing and token design. 

His leadership team includes CTO Carl Hua, a Celsius alumni; head of research Alex Lin, a former venture partner at Old Fashion Research, a firm run by former Binance executives; and head of talent Chris Adams, who held the same role at Atomic VC.

Shima plans to set up an incubator where its team will advise a number of portfolio companies and provide consulting on tokenomics and governance structures. The firm is currently expanding its team.

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