VC makes $100 million investment in Web3 infrastructure
Emma Cui is a founding partner of web3 accelerator and Singapore-based venture capital fund LongHash Ventures. She turned to crypto after starting her career in banking, then took a job at McKinsey, where she met its co-founder. Cui is now on a mission to catalyze the growth of Web3 with a $100 million Fund II that intends to invest in building better Web3 infrastructure.
With the market down, Cui believes now is the optimal time for VCs to invest in companies that are laying the groundwork that will shape the future of decentralized finance (DeFi.) Over the next five years, she hopes to double on projects that offer scaling solutions, cross-chain systems, and other tools that impact games, NFTs, the metaverse, and more. I spoke to Cui about her experience working as a woman in VC, what first sparked her interest in the crypto world, and why she’s so excited about the possibilities of her new Fund II.
Amy Shoenthal: Tell me about your professional background and how you discovered the world of crypto.
Emma Cui: It all started with buying ETH in early 2016 after attending the Vitalik meet in Singapore. I was very intrigued by the concept of smart contracts and how decentralization can open up a world of possibilities.
Shoenthal: Are you referring to Vitalik Buterin, the founder of ETH? Are you on a first name basis?
Kitchen: Yes, that’s who I’m referring to. It was early 2016 and Vitalik was only 22 at the time. The meeting took place at the Singapore Management University EMS. There were only about fifty people in the crowd. I remember being hypnotized listening to him speak on stage.
The meeting had an immediate impact on me. I got home and started reading about all things ETH. Understanding cold storage and wallets was a huge pain back then.
That’s when I decided to look for a job in crypto. I started talking to crypto startups to see if I could find a good fit. At the time, there were very few non-technical people working in crypto and even fewer women, so I couldn’t find suitable opportunities. At the same time, McKinsey offered me a position as a management consultant, helping financial institutions launch digital attacker businesses, which gave me a background knowledge for my next role.
A year later, my ex-colleague from McKinsey Shi Khai and decided to start LongHash Ventures. We have since become Asia’s leading Web3 accelerator and venture capital fund.
Shoenthal: You recently announced a $100 million fund II. What types of investments are you looking to make?
Kitchen: The main thesis of our fund II is to focus on multi-chain infrastructures, in particular around innovative layers 1 (L1), scaling solutions such as L2 rollups or cross-chain solutions, interoperability frameworks such as Spotted and cosmos ecosystem, as well as key modular layers such as identity, privacy, data availability. We believe that the current level of infrastructure is not capable of supporting large-scale retail-friendly applications, and therefore there are significant benefits to building and investing in robust infrastructure. .
Shoenthal: Have you already made significant investments?
Kitchen: We have invested in many innovative projects such as Astar, Acala, Balancer, Lit Protocol, Parcel, Coinshift and Safe.
We have always believed in the multi-chain thesis, which is why we were the first investors in Spotted. We worked with them to launch their very first accelerator. Now we are also looking at Cosmos, cross-chain solutions like Axelar and other stacking solutions such as zkSync.
We have also recently invested in Sagaco-founded by Rebecca Liao and advised by Zaki Manian, the former director of Tendermint Labs. Saga wants to make it easier for developers to launch their own blockchain or app chain into the Cosmos ecosystem.
Shoenthal: What obstacles have you encountered as a woman in crypto?
Kitchen: It’s true that there are subtle differences in how women and men are treated, and it’s not just in crypto. I’ve experienced both conscious and subconscious biases when it comes to getting people to buy into my ideas or feel like they’re being heard. As women, we have a duty to ensure that our opinions are heard. We have to punch above our weight.
We had a hard time raising funds during the 2018/2019 bear market. I was rejected countless times when we tried to create our first fund. We had four people and we were accelerating 20 projects a year. At one point, we only had two months of track in the bank. Ultimately “Summer DeFihappened in the middle of 2020, and that’s when things finally started to take off.
Looking back, I think I did some things well. First, I networked rigorously. I went to as many events as possible, did my research, and built a meaningful network. Second, I didn’t take no for an answer. I pitched Temasek for four years, and they recently agreed to invest in our accelerator.
Shoenthal: Speaking of which, you’re one of the few VCs who also uses an accelerator. Tell us more about the LongHashX accelerator and the role you see it playing?
Kitchen: We were one of the first web3 focused accelerators when we started in late 2017 and now we are the leading web3 accelerator in all of Asia. We have built an extensive network and know-how to support early-stage Web3 projects in a systematic and scalable way.
We want LongHashX to take on the role of trusted “co-founder” for early-stage projects, not only supporting the transition of technical talent from web2 to web3, but to always be at the forefront of knowledge and web innovation3.
Shoenthal: As an investor, what advice would you give to aspiring web3 founders who want to start their own projects?
Kitchen: There are so many tips a new founder needs to build a successful project. Solve a big enough problem that you really care about. Look for co-founders or early team members who believe in the same vision as you. Most importantly, hustle hard.
Shoenthal: There was this big push to get in early, but then there was a drop. Can you talk about the dip?
Kitchen: It’s been said a lot, but the best building happens during a bear market. Today’s major DeFi protocols were built during the bear market of 2018 and 2019. There’s less distraction and less noise, which means more room for experimentation. This is also the best time for VCs to invest as valuations are at more reasonable levels.
Shoenthal: How can we really integrate accessibility and diversity into web3 in all the ways that we failed to do in web2?
Kitchen: I think web3 is a real promise of accessibility and diversity. The entire Web3 space is built around an open, permissionless system that anyone can access and contribute at any time. There is a quote from Thomas Jefferson that says, “Eternal vigilance is the price of freedom. I think the same applies to Web3.