Portfolio Update: Rocket Pool
Some great news on one of our portfolio projects, we announced that we realized profits on our Rocket Pool (“RPL”) token position, selling some of our tokens at an average price of USD $1.67 per RPL for a total of USD $352,620. These RPL tokens were acquired at an average price of USD $0.21 per RPL token during the Rocket Pool token presale in 2017, find all the details in our public announcement.
Rocket Pool is a next-generation Proof-of-Stake (PoS) infrastructure service, designed to be highly decentralised, distributed and compatible with staking in Ethereum 2.0. It offers any user, business, exchange or fund the ability to earn a yield on their Ethereum (“ETH”) holdings without worrying about maintaining an extensively technical staking infrastructure. Rocketpool was an early investment by us. The founder David Rugendyke was a complete standout to us and is a total developer ninja. Even in 2017 they already had a massive head start in Ethereum staking community!
We continue to hold the majority of our Rocket Pool (“RPL”) position and intend to use the Rocket Pool offering for part of the Company’s own Ethereum 2.0 (“ETH”) staking activities, with the aim of generating further yield revenue for the Company.
George McDonaugh, Managing Director and CoFounder of KR1 commented: “With KR1 being the only institutional participant in the initial Rocket Pool token sale, we received an offer earlier last year for our entire Rocket Pool position from a well-known and popular crypto fund, but decided against a sale as we continue to be extremely excited about Rocket Pool’s roadmap and the role of the RPL token in Ethereum’s staking future. Only with recent market conditions, the Company decided the timing was appropriate to realise some profit while continuing to hold a healthy position in anticipation of the roll out of Ethereum 2.0.”
We are long Rocketpool, and long live tokens!
Portfolio Update: Vo1t
In May we announced that Genesis Trading, a subsidiary of New York based Digital Currency Group acquired Vo1t Ltd (“Vo1t”). The Vo1t board of directors and majority of shareholders approved the deal terms, read the exact financial details in our public announcement. Also please refer to the other two previous announcements about Vo1t’s seed round and their second funding round (and uplift to KR1’s position) for context.
Vo1t was a promising London-based digital asset custodian that was seed funded by KR1 and served as KR1’s main digital asset custody solution since the early stages of the Company. As a consequence of this acquisition we will evaluate Genesis Trading’s and Vo1t’s combined offering after their integrations are completed but we will also explore alternatives in the digital asset custody sector.
A bit on the nature of the deal: Over the past months, the team were working on a getting ready for an additional funding round as well as were in talks about potential acquisitions with bigger players in the crypto industry but all of that was unfortunately hit hard by the Covid crisis and resulting volatility in the crypto markets (see our “Extreme Volatility in Bitcoin and Digital Asset Markets” post). With this, many of the funds they were talking to as well as business development/M&A teams of larger crypto organisations froze all deals that were in the pipeline and thereby derailed the process.
With the lack of short term funding options available, the Vo1t board approved a clean exit to a world class operator as the best result for the team and shareholders in this situation. Although disappointing as an investment for KR1 and our continued feeling that Vo1t did not achieve the potential that it had, we felt the decision to sell was a reasonable one for the team in the circumstance they were in. As minority equity shareholders, by definition, we have little control over the negotiations relating to an exit of our equity investments (very much in contrast to our liquid tokens/digital asset positions where we are in direct control). That said, we did make sure to protect our downside when Vo1t closed its second funding round by insisting on holding the same class of shares as all other investors (as opposed to having other investors hold liquidity-preference or preferred shares/debt-based instruments that would have priority over ordinary shares). Because of this, KR1 was able to get some cash from the deal in a time when crypto assets are cheap and therefore present an opportunity to get that cash to work.
George McDonaugh, Managing Director and Co-Founder of KR1 commented: “We’ve been on the journey alongside Vo1t since day one and are pleased for the team that their hard work and dedication has been recognised. KR1’s focus remains on more liquid digital assets, where we are seeing great opportunities in current market conditions, both, in newly forming projects as well as in the digital asset secondary markets.”
Investment Update: Argent
Argent, a simple and secure mobile crypto wallet and a portfolio company of KR1, has completed a successful USD $12 million ‘Series A’ fundraising round at a post-money valuation of USD $45 million, issuing ‘Series A Shares’ with liquidity preferences to new investors. The funding round was led by US cryptofund giant Paradigm and joined by existing investors such as Index Ventures and Creandum.
Following the completion of the funding round, we hold ‘Ordinary Shares’ representing a fully diluted ownership of 0.578% in Argent from the Company’s participation in Argent Lab’s seed round. This values our stake in Argent at USD $260,049 at the post-money valuation.
Argent is an important company in crypto due to their experience as a team with acquiring and retaining tens of millions of users in their previous endeavor, most crypto teams lack this experience. Alongside this, Argent will become an important gatekeeper for DeFi services looking for lots of users. New DeFi protocols and products will all fight for the same user base to get momentum in their projects, Argent are headed for critical mass.
Keld van Schreven, Managing Director and CoFounder of KR1, commented: “Argent is building the best wallet in crypto to onboard the next billions of dollars and bring financial empowerment to millions of users through crypto. We are tremendously excited about what Argent has launched so far and for the road ahead.”
Argent goes from strength to strength and now has 20,000+ wallets;
Inside KR1: Brave Beginnings in CityA.M.
“On Tuesday, 8 March 2016, Bitcoin was trading at $412.07 and Ethereum was hot on its heels at $10.86. The KR1 team had just inked a deal to take a dormant publicly listed former Romanian property investment company and turn it into a publicly listed crypto fund. Every single person involved in the process, whether legal, administration or fundraising (except for the KR1 founding team obviously) had never even heard the word ‘cryptocurrency’ or ‘Ethereum’ before in their lives and loosely associated ‘Bitcoin’ with some shady things on the dark web…”, continue reading on CityAM.
KR1 in the Vox Markets Podcast
Keld and George were featured on the Vox Markets podcast discussing all the latest announcements, have a listen.
KR1 is Europe’s leading digital asset investment company supporting early-stage decentralised and open-source blockchain projects. Founded in 2016, KR1 has been a notable first investor in many key projects that will power the decentralised crypto assets, platforms and protocols that form the emerging Web3 infrastructure.
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