Crypto VC Firm Inflection Launches $40M Fund to Build ‘Open Economy’

Early-stage venture firm Inflection has launched a new $40 million Mercury Fund to invest in companies building the “open economy.”

Inflection’s investment thesis is that “stakeholder-owned software networks will compose an alternative economy, which is vastly automated, transparent and accessible for everyone with an internet connection.” The firm calls this the “open economy.” Others in the VC space have called it the “ownership economy.”

Whatever the name, the thesis dovetails nicely with the rising tide of Web 3, which has seen a flood of investment from venture capital firms new and old.

Alexander Lange, general partner and founder of Inflection, told CoinDesk in an interview that the fund doesn’t want to be “locked into any particular categories” regarding its investment focus.

“We are keeping a very open mind within this very quickly expanding economy and can’t really tell you what will be the rising narratives a year from now. What we’re trying to do is be very sensitive to adoption cycles,” Lange said.

Limited partner investors in the Mercury Fund include Galaxy Digital, Digital Currency Group (CoinDesk’s parent company), Accolade Partners, Evanston Capital, Isomer, Hutt Capital, Multiple Capital, Presight Partners and Rockaway, as well as individual backers Marc Andreessen and Chris Dixon of Andreessen Horowitz and noted tech investors Bo Shao and Erik Voorhees, among others.

Inflection typically invests between $500,000 and $1.5 million into early-stage companies. The firm said it has a community-centric investment approach, sharing ownership stakes in the fund with founders of the investment companies and innovator communities.

Founded in 2019, Inflection has a global team that is spread out across Boston, Berlin, Munich, Madrid and Denver.

Previous Inflection investments included programmatic asset management protocol Balancer, peer-to-peer code collaboration platform Radicle and Web 3 operating environment Anytype.

Investments that have already been made under the new Mercury fund include neo-bank Unstoppable Finance, identity protocol Violet, open data engine Defined and Catalog, an open archive for NFT-powered music.