Bain Capital Ventures launched its first hyper-focused fund that will invest solely in crypto-related projects from startups to DAOs, joining ranks with other prominent investment firms that are plugging millions into the ever-growing sector.

What happened: Bain Capital Crypto will pour US$560 million into a variety of projects focused on DeFi and infrastructure of the web3 and blockchain space; scaling solutions, privacy products and storage solutions. The fund is looking at a ten-year-long game in terms of firms it chooses to work with.

• “The number one priority is investing in the infrastructure,” said Bain Capital partner, Stephan Cohen, adding that they have an interest in funding “components used to build the ultimate internet services we think we’ll be interacting with in the future.”
• The fund will also invest heavily in the growth of decentralized autonomous organizations. As they become more mainstream, BCC plans to lead the space, investing in companies that offer governance and payment services to DAOs.
• The fund has already invested US$100 million across a dozen early-stage projects. Over the next few years, it will deploy funding to dozens more, potentially launching more funds as needed.

Why it matters: Bain is following other financial behemoths playing catch up with the crypto markets and signalling that the once ugly duckling of the economy has blossomed into a swan—potentially very profitable swan (if you buy the hype and sell the news).

• Sequoia Capital launched its own US$500-600 million crypto fund, and Andreesen Horowitz funded their crypto-specific arm to the tune of US$4.5 billion.

Bain Capital Crypto will operate outside of conventional venture capital operations, with much more flexibility to fund startups, get involved in governance, and buy liquid tokens.

• “The reality is, we felt like we couldn’t service this market well from a generalist venture fund,” Cohen said, adding that, “we think to support founders properly, you need to take the approach we’ve taken here.”