Bearish Crypto Market Affects Venture Capital Firms

Jalak Jobanputra, the co-founder of Future Perfect Ventures in an interview with Fortunes’ Balancing the Ledger on February 11, 2019, expressed concern for venture capital valuations saying that the latter have been seriously affected as a result of the bearish cryptocurrency market.

Jobanputra was asked if there is any trend of discounted venture evaluations across the cryptocurrency space. In reply, she stated, “given how much the volumes have decreased in the last year, I wouldn’t be surprised if we are seeing valuations come down on the secondary markets for some of these companies.”

A report released recently showed that shares of the crypto finance firm ‘Circle’ was trading at a 75% discounted rate in the secondary markets.

Jobanputra is a member of the Board of Bitpesa, which is a digital foreign exchange. Reportedly, she has invested in crypto and blockchain related companies such as Blockstream and Civic.

Commenting on why the company did not invest in initial coin offerings, Jobanputra went on to explain that “they were exposed financially to the downturn in the crypto markets as well as from a technology standpoint. And a lot of my experience investing in the Internet days informed a decision to stay out of the ICO market.”

Further, she went to mention that crypto companies are slowly and steadily pivoting into the venture capital space, although most venture capital funds in the past were keeping away from the crypto markets. She also emphasized on the importance for firms today to find new ways to raise funds in order to survive the weather conditions prevailing in the crypto market.
Jalak Jobanputra founded the Future Perfect Ventures in 2014. She previously worked in investment banking before she started funding early-stage tech startups in the late 1990s. The idea of an investment fund came after having participated in her first Bitcoin conference in 2013.

“As an immigrant, as a woman, as someone who had experience in tech, I felt we were going to be well positioned. I had spent a lot of time in emerging markets and Silicon Valley, so I was able to bridge cultures and look at the world from a macro perspective,” she once said in an interview.

Future Perfect Ventures is a venture capital firm which was founded in the year 2014 in New York. The main focus of the company is investing in companies which are in its nascent stage and are primarily engaged in technological developments including blockchain, machine learning, and data analytics.

A Bloomberg report released recently stated that although 2018 saw the crypto market slump, the launch of new crypto venture funds far exceeded that of new hedge funds in the crypto space for the first time. Reportedly, 2018 saw approximately 125 new crypto venture fund launches as compared to 115 new investment-oriented crypto hedge funds.