The last time Archetype raised a venture fund, Sam Bankman-Fried stood atop the crypto industry amid a boom time that quickly evaporated. Now, just over three years later and amid a roaring bull market, the New York-based firm is back with a new fund: a $100 million vehicle that will once again focus on backing early-stage seed rounds of blockchain companies.
In an interview with Fortune, Archetype founder and general partner Ash Egan argued that blockchain technology is on the verge of its mainstream breakthrough, likening the current moment as “post-AOL, pre-Uber” in comparison to the history of the internet. “Our belief is that crypto rails underpin all global commerce, if you take a decade or multi-decade point of view,” Egan said.
It’s a familiar claim in the rollercoaster sector, whose proponents have long claimed that it is poised to disrupt any number of industries, from payments to IPOs to real estate transactions. But with a friendly regulatory atmosphere and widespread institutional interest from Wall Street, crypto may finally have its breakthrough moment—and Egan’s firm has new capital to deploy.
Timing the market
Archetype raised its first $55 million fund in 2021, followed by its second $155 million fund in 2022, at the height of the last crypto bull run. Though Archetype’s third fund clocks in at a smaller $100 million, Egan said that it was a deliberate decision to take the right backers, or limited partners, with only one new LP coming onboard. Archetype’s investors are a combination of pensions, endowments, sovereign wealth, and other institutional investors, including the funds of funds Accolade Partners and TrueBridge Capital, as well as the blue-chip venture firm Sapphire Ventures.
Archetype has already had major wins out of its portfolio, including the wallet provider Privy, which was acquired by the payment giant Stripe earlier this year, as well as US Bitcoin Corp, which did a reverse merger with Hut 8, now the partner for Eric Trump’s American Bitcoin. Archetype also holds liquid investments, including more than $10 million in Solana and $40 million in Ethereum. It has around $350 million of assets under management.
According to Egan, Archetype has already distributed around $10 million of its first fund back to investors, though he said the firm takes a long-term approach. “If things are going to run and we have winners, we don’t want to sell too early,” he said.
A veteran in the space, Egan has the track record to gauge where the sector is headed. He was first drawn to crypto by the rise of Ethereum and smart contracts in 2015. At the time, Egan was working at a small venture outfit in Boston called Converge, where he made his first crypto investment into the blockchain intelligence firm Chainalysis.
Egan later joined the Ethereum-focused software company Consensys to launch its venture arm amid the initial coin offering craze of 2017, then became a partner at the venture firm Accomplice before starting his own firm. He founded Archetype in New York with the thesis that SoHo would be the “Sand Hill Road” of the next decade, referring to the Silicon Valley venture capital hotspot. Several top crypto firms are located within blocks of Archetype’s headquarters, including the decentralized exchange Uniswap and the social platform Zora.
Archetype’s next round of investments include companies with a more consumer focus such as Remix, a crypto and AI-powered app that allow users to create mobile games. “The future is going to be building killer products, you get your first 1,000 true fans, and then you go from there,” Egan said. “That’s how you get true networks.”