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VanEck is diversifying with the launch of a new venture fund.
The $30 million fund is focused on early-stage startups specifically with the goal of investing in fintech projects at the intersection of crypto and AI.
“Those two components are very much like horizontal technologies. And I say that because crypto is like the value layer and AI is where you can now take financial services that are typically performed by people, represent them in code and start to automate things,” general partner Wyatt Lonergan told Blockworks.
Read more: From crypto ETFs to VC: VanEck unveils $30M fund
The fund’s made a couple of investments so far, but VanEck isn’t quite ready to divulge any details just yet. What we do know is that it plans to make up to 35 investments, and the checks can range from $500,000 to $1 million.
The goal is to focus on early-stage (pre-seed and seed), but Lonergan’s not looking to completely shut the door on participating in a Series A if the right project comes around.
Read more: The case for AI finding a killer app for crypto
“We need to be opportunistic. If we see something that we missed because we weren’t around a year ago, they’re raising enough ground and it’s attractive — we’ll look at it. But we are always price-sensitive. When you have a small fund, you have a concentrated fund structure, the idea is that any one investment could return the fund multiple times. That’s very important,” he said.
Both Lonergan and his partner Juan Lopez came from Circle Ventures. He helped launch Circle Ventures back in 2021 before leaving for VanEck.
The fund will have an interest in stablecoins, which shouldn’t be a huge surprise given Lonergan’s past and VanEck’s own interest. While the firm itself doesn’t have a stablecoin, it invested in the stablecoin firm Agora, which is helmed by Nick van Eck, the son of VanEck CEO Jan van Eck.
But it’s not just personal interests that pique both Lonergan and the 69-year-old investment management firm.
At the “core,” Lonergan said, “are stablecoins and…within that, we kind of believe the underlying blockchains are more or less being commoditized to a point that there’s enough great technology out there. That’s best exemplified by [the fact that] you can go onto any crypto wallet or Coinbase today and upload dollars for free, send it across the world.”
Read more: Are stablecoins a leading indicator for major rallies?
Given Lonergan’s belief that stablecoins, in particular, could see regulatory clarity over the next two years, he explained now is the right time to start laying the framework for startups that could succeed in a positive regulatory environment.
Lonergan reasoned that the door opening for fintechs to use stablecoins won’t be a very obvious crypto use case. It may be that crypto connections won’t be really obvious to those adopting stablecoins.
“It won’t be this crypto thing. If you’re not investing in this category, [and] it could be a weird tagline, but I think it could be that kind of ChatGPT moment for crypto, because [stablecoins] are the one technology that businesses will consume at scale, right? AI was not apparent until you had Chat,” Lonergan said.