Arrington Capital Launches $100M Algorand Ecosystem Fund

Michael Arrington’s crypto venture-capital firm, Arrington Capital Management, is launching a $100 million fund for bets on projects building on the Algorand blockchain.

Called the Arrington Algo Growth Fund (AAGF), the fund will invest in tokens and equity, Arrington, the founder of the TechCrunch blog, told CoinDesk in a telephone interview. It is Arringtonl’s second crypto-focused fund after the flagship Arrington XRP Capital Fund, which in March reported $236.7 million in assets.

Arrington Capital now has over $1 billion in assets under management, according to a press release.

AAGF adds to a growing list of crypto funds now pumping over $500 million into cryptographer Slivio Micali’s proof-of-stake blockchain. The fund will help pay for investments ranging from non-fungible tokens to a partnership with Miami to use Algorand in municipal projects – all in an effort to accelerate the development of Algorand's "ecosystem."

“Our LPs (limited partners) include several parties who align with the Algorand vision and want to support the expanding ecosystem with new offerings,” Arrington said. “We may also bring on additional investors. Additionally, I am personally investing in the fund.”

Algorand, like other protocols, is eager to gain an edge in the lucrative decentralized finance (DeFi) arms race. Its 11 million addresses pale in comparison to sector leader Ethereum’s 157 million, but the blockchain is far more nimble, both in terms of transaction processing power and speed. Even so, Algorand lacks an established DeFi ecosystem that other chains enjoy.

However, that may start to change. Yieldly – a “no-loss lottery” (akin to PoolTogether) and Algorand’s first native DeFi application – has amassed over $11 million in total value locked (TVL) following its debut on Saturday. Keli Callaghan, Algorand's head of marketing, said the app, which launched with backing from the Algorand community fund, is already becoming a hit.

But the network is also courting opportunities on the more centralized side, Callaghan said. That includes projects that will allow financial institutions to use DeFi infrastructure and provide central banks with ways to transfer digital currencies.

“Our perspective is not that one is going to overtake the other, that one's going to win or make the other irrelevant, but they sort of converge,” she said. “We see ourselves as sort of helping with this bridge” between banks, firms and DeFi.

Arrington Capital may be best known in the cryptosphere for its XRP fund, which launched in late 2017 also with $100 million in capital. The firm has remained true to Ripple Labs’ embattled token even as other companies in the market flee.

“We are extremely loyal to Ripple and to XRP and we believe in that ecosystem,” Arrington said, “but it's a multichain world.”

As for how the XRP army will react: “I’m interested in the answer to that myself – we’ll see," he said.