Dispersion Capital Opens $40M Fund for Web3 Infrastructure

New crypto-focused venture capital firm Dispersion Capital has launched a $40 million fund focused on pre-seed and seed investments in Web3 infrastructure projects. Limited partners backing the fund included the venture capital arm of USDC issuer Circle, enterprise-focused crypto firm Ripple and Web3 infrastructure giant Alchemy’s investment arm.

The fund is opening for business during an extended crypto bear market that has slowed investments in the space, though infrastructure projects have proven to be the most resilient sector.

“We’re looking for teams that are bridging today’s infrastructure gaps and building new standards for decentralized tech layers,” Patrick Chang, founder and managing partner of Dispersion Capital, wrote in an announcement post. “Their work will make it possible to create and launch multi-chain, multi-currency, and multi-platform applications. We want to find and fund the fundamental tech layers that make this possible.”

Chang told TechCrunch that Dispersion Capital has already deployed about 10% of the fund, backing 20 companies, including on-chain security platform Chaos Labs and Mystiko Network, a Web3 privacy infrastructure layer.

In his post, Chang noted that venture capital money poured into the crypto industry in 2021, and the focus was on the so-called application layer of Web3, or decentralized applications (dapps) that helped onboard users into areas such as non-fungible tokens (NFTs) and decentralized finance (DeFi). As the bull market gave way to the bear, crypto infrastructure was found wanting.

“Web3’s foundational layer wasn’t (and still isn’t) ready for billions of users,” wrote Chang.

Chang, an active angel investor, has worked in venture capital for 20 years, including stints at Bain Capital Ventures and Samsung Next. As an institutional investor, Chang has guided investments into a number of crypto companies, including Alchemy, Dapper Labs and Flow, he told CoinDesk in a message.

Read more: Alchemy’s Venture Arm Wants to Align With 'Web3 Missionaries, Not Mercenaries’

Update (UTC 15:56): Update adds Dispersion Capital’s portfolio to the fourth paragraph and expands on Chang’s work history in the final paragraph.