Toronto-based venture capital firm Contango Digital Assets has closed the first $5 million of its targeted $10-million Blockchain x AI Seed Fund.
The fund has already invested in a couple Canadian companies from the $1.5 million that has already been deployed.
Contango says the fund is backed by Dean Skurka, the CEO of one of Canada’s largest crypto companies, WonderFi. Contango also counts Richard Ma, the CEO of blockchain security firm Quantstamp, and Mario Casiraghi, the CFO of decentralized AI algorithm marketplace SingularityNET, as investors in this round.
Established in 2020, the firm is led by managing partners Mike Grantis, who formerly founded digital marketing agency Ad Turbine, and former Coinsquare wealth director Joshua Field.
Contango says it is focused on accelerating the global adoption of decentralized systems, with a primary focus on “decentralized artificial intelligence” (DAI). DAI is an AI system that uses blockchain technology to distribute, process, and store data across a network of nodes, according to Techopedia.
As its name suggests, the Blockchain x AI Seed Fund invests in North American seed-stage companies working at the intersection of blockchain and artificial intelligence. Contango says it has earmarked a portion of the fund to projects to be made in the Bittensor ecosystem, a DAI project that Contago’s subsidiary, General TAO Ventures, is focused on developing. Contango said that the strategy allows it to work directly with their portfolio companies through their subsidiary.
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“We set out to raise [$5 million] and quickly became oversubscribed,” Field said in a statement. “I think that’s a testament to the track record of investing we have done since 2021, and to the growing interest in both crypto and artificial intelligence.”
“This intersection has been an area where we have garnered incredible deal flow and produced the most outsized returns, so focusing here will provide a competitive edge for Contango and our LPs,” he added.
Field told BetaKit that the fund will operate with a standard GP/LP structure and will support 40 to 50 projects in a follow-on to co-lead capacity over the next five to seven years. The fund’s cheque size ranges from $150,000 to $250,000, and will save about one-fifth of its capital for follow-on investments.
Field added that, while the fund doesn’t have a specific allocation for Canadian companies, the fund has already invested in a couple Canadian companies from the $1.5 million that has already been deployed. One of those is Toronto-based Hivello’s $3.3-million CAD pre-seed round this past January, a startup looking to make building Web3 applications more accessible.
Feature image courtesy Contango.
