Framework Ventures Launches $400M Fund to Back Web 3 Gaming, DeFi

Crypto investment firm Framework Ventures has reached $1.4 billion in total assets under management after securing $400 million for its third venture capital fund. Half of the capital will go toward blockchain gaming investments with Web 3 and decentralized finance (DeFi) as secondary areas of interest.

After emerging as one of the primary beneficiaries of 2020’s “DeFi Summer,” Framework’s new focus on blockchain gaming is notable.

“We think Web 3 gaming is the sector that has the most potential for growth within the wider blockchain industry,” Framework co-founder Michael Anderson told CoinDesk in a statement.

Framework initially focused on DeFi because when the first fund launched in 2019, financial solutions had the best product-market fit for blockchains, Anderson told CoinDesk in an interview. However, subsequent innovations in layer 2 and non-Ethereum blockchains have shifted crypto excitement toward blockchain gaming.

“[Gaming] has that same sort of Spidey-sense feeling where it feels like gaming is really about to take off based on the amount of energy, people focused on it and just the infrastructure that’s enabling it,” he said.

The Framework motto is “go where the entrepreneurs go,” Anderson added, and he sees entrepreneurs increasingly heading into the gaming space.

That said, gamers have so far proved to be stiff competition for crypto adherents, railing against non-fungible token (NFT) plans from some of the industry’s top studios.

Read more: Crypto Fans Rejoice, Gamers Revolt as Ubisoft Announces NFT Plans

Last year, crypto venture funds hit new records after Andreessen Horowitz launched a $2.2 billion fund and Paradigm countered with a $2.5 billion vehicle. The digital asset pullback at the beginning of 2022 hasn’t dulled the hunger for new funds. Sequoia Capital and Bain Capital each recently committed nearly $600 million to crypto investments.

Framework was founded in 2019 by former Snapchat project manager Anderson and Vance Spencer, who handled business operations for Netflix in Japan. Capital for Framework funds largely comes from a small set of institutional investors.

Framework was an early DeFi advocate and has invested in the likes of oracle network Chainlink, liquidity protocol Aave, data indexing protocol The Graph and liquidity provider Tokenmak. Framework isn’t new to the blockchain gaming space, having previously backed play-to-earn game developer Illuvium.

“Founders understand our cultural influence in the space because our affiliate, Framework Labs, has spent the last three years building alongside them, running nodes, participating in on-chain governance, building tools, staking and more,” said Spencer in the press release. “We believe we’re well-positioned to outperform our competitors, including the Sand Hill set that is only now coming into crypto and Web 3.”

UPDATE (April 19, 17:09 UTC): Adds quotes from interview with Framework co-founder Michael Anderson.