Brevan Howard Digital, the crypto division of the renowned global asset management firm, and Galaxy Digital, the crypto enterprise founded by billionaire Mike Novogratz, have jointly invested in the third fund of crypto accelerator Alliance.
As per the limited partner meeting slides from Alliance dated March 26 and obtained by The Block, Alliance Fund III secured its first close in February with commitments totaling $20 million from Brevan Howard Digital and Galaxy Digital. A source familiar with the matter informed The Block that each firm has already injected $10 million into the fund, making it more than a mere commitment.
According to the meeting slides, Fund III aims to raise an additional $80 million by July, thus reaching a cap of $100 million. The fund intends to allocate $500,000 per startup.
Alliance’s third fund arrives amidst a resurgence in crypto funding following a two-year decline. Last month, crypto venture capital funding hit an 18-month high, reaching $1.4 billion, as reported by The Block Pro’s Deals Dashboard.
In light of the crypto market’s revival, numerous venture firms are either raising or have raised new funds. For instance, 1kx recently secured $75 million to support early-stage crypto startups. Paradigm is allegedly in discussions to raise between $750 million and $850 million for a new fund. Additionally, Galaxy Digital, Hack VC, and Hivemind Capital are reportedly raising $100 million, $100 million, and $50 million, respectively, for their new funds.
Alliance’s third fund follows the success of its first two funds. Since its inception in 2020, Alliance has accelerated 12 cohorts comprising over 200 startups.
The first fund of Alliance has backed prominent startups such as Arbitrum, Immutable X, and Axie Infinity. It raised $15 million in 2021 from investors including Jump Capital and billionaire Mark Cuban. By December 31, 2023, the invested capital of the first fund had surged over $90 million, marking a growth of 6.1 times its initial value.
Fund II, which was still deploying funds as of December 31, has now finished deploying, according to the source. The second fund, valued at $30 million and raised in 2022, has supported notable startups including Tensor, Hyperlane, and Story Protocol.
As a crypto accelerator, Alliance offers mentorship and funding to selected startups within its cohorts. Recently, the firm inaugurated its headquarters in New York City, aimed at fostering collaborative work among portfolio companies, mentors, and peers.
Notably, Alliance counts high-profile investors such as Peter Thiel’s Founders Fund, Solana Labs co-founder Anatoly Yakovenko, and Visa’s head of crypto Cuy Sheffield among its backers.
While Peter Johnson and Colleen Sullivan from Brevan Howard Digital have been associated with Alliance in individual capacities, it marks the first direct investment by Brevan Howard Digital itself in Alliance. Conversely, Galaxy Digital is a repeat investor in Alliance, having previously anchored its second fund. However, representatives for Alliance, Brevan Howard Digital, and Galaxy Digital declined to comment on the matter.
