A Dearth of Web3 Investment Options Has Australian High Net Worth’s Looking Overseas To Invest
First published in The Australian on 23 March 2022
Australian investors keen to tap into the hot web3 and cryptocurrency sectors are having to head overseas due to a lack of investment options locally.
It comes as Silicon Valley cryptocurrency investor Katie Haun launched a new $US1.5bn web3 fund overnight, committing $US500m to early stage investment and $US1bn to an acceleration fund.
Nick Abrahams, Norton Rose Fulbright’s global co-leader, digital transformation practice said Australian high net worth investors and family offices looking to invest in crypto and web3 were generally looking overseas at the moment, with few options available onshore.
While there’s currently talk around setting up web3-specific funds locally, no major players are yet to emerge.
“There’s certainly been a number of specific funds raised in the US, and I think there’s been a flow of Australian high net worth money out of Australia into those funds,’’ Mr Abrahams said.
“There are a couple of more under-the-radar small web3 funds or investment groups in Australia.’’
Mr Abrahams said Airtree was playing in the sector and superannuation fund Rest had indicated it would invest in crypto assets, however there was not much else in the market at the moment.
“I’m certainly seeing plenty of folks coming in, looking for money with good projects.
“But web3 has a different investment profile. The high net worths are very interested in it.
“To quote one high net worth, if you can get your investment returned in five months, this is an asset class you need to be thinking about.’’
There needed to be an ability for investors to grapple with some different concepts however, such as potentially holding their investment in tokens rather than traditional equity.
“We used to have SAFE notes, – simple agreements for future equity – we now have SAFT notes – simple agreements for future tokens. That’s been a big shift in people’s mindset.
“A lot of activity with people putting together DAOs – decentralised autonomous organisations – they have some tax and regulatory issues associated with them.’’
Mr Abrahams said web3 investments had taken place largely in stealth mode, operating through forums such as Discord groups, rather than the usual venture market investor pitch.
Mr Abrahams said there were also a lot of people sitting on extraordinary amounts of cryptocurrency, which for various reasons they may be unwilling to convert to fiat currency, but who were interested in web3 opportunities.
Ms Haun, a former general partner at Andreessen Horowitz, said in a statement that her fund, Haun Ventures, would be involved in helping web3 mature, and developing those companies at the forefront of the push.
“We will partner with our portfolio to lead a global campaign for web3 that combats misperceptions, engages policymakers, highlights positive use cases, and wins the hearts and minds of leaders across all sectors,’’ she says.
“We believe this approach will help lay the foundation for the web3 projects we support to reach a billion-plus people worldwide.
“We’ve assembled a world class team of leaders that have deep experience in very specific areas (inside of crypto and out). They are all-in on crypto and have already had a positive impact on how web3 is viewed throughout the world.’’
CMC Markets said the value of the global crypto market cap increased 3.13 per cent to $1.93tn in the past 24 hours.
“The major crypto currencies rallied, with both Bitcoin and Ethereum up more than 3 per cent, to just above $US42,700 and $US3000 respectively.
“Cardano jumped 7.81 per cent, to $US0.97. Cardano outperformed most of the major digital tokens in the past week, up 21 per cent in the last 7 days.”