White Star holds first close for $30m Digital Asset Fund

The vehicle started fundraising at the beginning of the year and has collected more than two thirds of its target capital so far.

"The coronavirus outbreak slightly slowed down our fundraising, which had started at the beginning of 2020, but has not impacted our timeline," Eric Martineau-Fortin, founder and managing partner of White Star Capital, told Unquote. "We have already received commitments from a large pool of LPs. They are attracted to our strategy, which is dedicated to one of the most promising segments of the market, rich in opportunities with high-growth potential."

The firm plans to hit the fund's target by the end of the year, with the possibility of continuing to raise additional commitments during the first half of 2021, and expects to deploy its capital in the next two years.

This is the first speciality fund raised by White Star and will be run by New York-based general partner Sep Alavi, alongside principals Thomas Klocanas in New York and Sanjay Zimmerman in Toronto. The fund will also benefit from White Star's teams in London and Paris, as well as a network of venture partners in Tokyo, Hong Kong, San Francisco and Switzerland.

White Star is a technology-focused investment firm that targets early-stage companies with global ambitions, helping them scale internationally from series-A onwards. It has around $400m in assets under management and has raised three funds so far, managing a portfolio of 30 companies.

The firm has a presence in North America, western Europe, and east and south-east Asia, with offices in New York, London, Paris, Montreal, Toronto, Tokyo and Hong Kong.

Investors
Digital Asset Fund has built a diversified base of LPs composed of sovereign wealth funds, large institutions, corporations and family offices.

The fund has already received numerous commitments and is expected to raise additional capital from two large institutional investors, which will be joining its LP base in the coming months.

White Star's LP base includes the Korea Venture Investment Corp, the State of Guernsey, Principaute de Monaco, Investissement Quebec, CDPQ, Isomer Capital, Swen Capital Partners, Walter Capital Partners, Sagard Holdings Rothschild & Co, Clerville and Temaris Associes, among others.

"Institutional investors are increasingly entering the blockchain ecosystem through large investments," said Martineau-Fortin. "In addition to corporations and technology-dedicated investors, we have seen growing interest from generalist investors and institutions."

Investments
Digital Asset Fund invests in crypto-networks and blockchain-enabled businesses at each layer of the tech stack, including protocols, infrastructure and applications. It deploys $500,000-2m in initial investments with a core focus on Europe and North America, and plans to build a portfolio of 15-20 companies.

"This is an asset class where we see tremendous growth in the years to come," said Martineau-Fortin. "Our fund is in a positive position to maximise the investment opportunities that are arising across the world, following the increased digitalisation of our global economy, which has been accelerated by the pandemic."

Across Europe, the fund intends to target primarily France, Germany and the UK, with some investments in Scandinavia and the CEE region, especially in the Baltic countries and Poland.

Digital Asset Fund has already made two investments: a round for Montreal-based Dfuse, a blockchain API company that helps developers build performance applications by organising decentralised data; and the investment in France-headquartered Multis, which offers "crypto-first" business banking accounts with an aspiration to bridge the gap between decentralised and legacy finance.

The fund plans to make two more deals before the end of the year, one in Asia and one in the US, and has several investment opportunities in its pipeline, including various companies based across Europe.

"White Star Capital's international footprint and network, as well as our team's blockchain expertise, position us well to make an impact in the digital asset sector," said Martineau-Fortin. "Our platform and network will give us access to exceptional dealflow from various companies across the blockchain segment." 

The fund will usually co-lead rounds with other venture capital and technology-focused firms, splitting equally the total amount of the investment.

"We like to co-invest, because we believe that this diversification is important for the entrepreneur and at the same time allows for doubling the amount of capital that we deploy in a single round," said Eric Martineau-Fortin. "We invest with a very active approach, always taking a board seat in our investee companies to provide them with our expertise and managerial guidance."

People
White Star Capital – Eric Martineau-Fortin (founder, managing partner).

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