Bloccelerate VC just raised $12 million for its first fund that will back startups selling blockchain technology to enterprise customers.
The 3-year-old Seattle-based firm plans to invest in 10-to-15 early-stage companies, with an average investment ranging from $500,000 to $2 million. It has already made five investments in startups including Blockapps, Symbiont, and MakerDAO.
Kate Mitselmakher, a former executive with Gartner Invest, launched Bloccelerate in 2018. She said the pandemic has created a tailwind for blockchain applications as companies accelerate adoption of digital services.
“With that, we have seen specific use cases around multi-stakeholder record-keeping, supply chain, and capital markets come to the front,” she said.
Bitcoin has surged to record-highs over the past several months, helped in part by giants such as PayPal adopting digital currencies as payment options.
Sam Yilmaz, COO and general partner at Bloccelerate, said cryptocurrency is an initial use case for the broader blockchain industry. He likened it to how email was the first use case for the internet and led to e-commerce, remote data storage, and other applications.
“As the public knowledge of cryptocurrencies grows, more people are contemplating other use cases of the technology and implementing ways to upgrade workflows,” he said. “The use cases are numerous.”
Yilmaz, who previously ran Decentralized Applications Fund, said blockchain can be used to update info about the location and quality physical goods; to track ownership and entitlements on alternative assets and bonds; or to keep immutable records of mortgage files, for example.
BlockApps, a a Bloccelerate portfolio company, helps track products for Bayer Crop Sciences, for example, while Symbiont manages passive index data for Vanguard.
There are also a growing number of healthcare initiatives looking to use blockchain to create new efficiencies in healthcare, while maintaining patient privacy and security. Seattle health technology company Lumedic last month launched a new effort to create standards for digital identity in healthcare, aiming to streamline the exchange of patient data and remove bottlenecks in the larger healthcare system using blockchain technology.
“Some companies are even contemplating leveraging blockchain for timestamping of marriage certificates, verification IP rights, confirming qualification credentials of the workforce,” Yilmaz added. “One day, maybe court hearings and corporate authorities may be on the blockchain so that multiple stakeholders who don’t know or trust each other, can rely on the immutable records of what happened in the past.”
Mitselmakher said Bloccelerate does not have a geographic focus for investments but is excited about backing companies in its hometown. She cited the Seattle region’s history with blockchain tech, which includes current firms including Bittrex and a bevy of smaller startups.
“We believe this region has an abundance of talent and undersaturation of capital,” Mitselmakher said.
Bloccelerate raised capital from 45 limited partners for its first fund, which included a mix of family offices, high net-worth individuals, and one corporate investor.
