Advanced Blockchain Shareholder Update
We want to take a moment to provide you with some intel on recent developments at Advanced Blockchain. Given that we want to significantly enhance our investor communication, we will provide you and the capital market with insights on what we do and how we proceed with our investments on a regular basis from now on. In this shareholder update, we will address the following points in further detail:
- Sharpened strategic approach
- Change in board with a focus on international diversity
- Unbonding Polkadot and redeployment of capital
- Next steps
1. Sharpened strategic approach
Advanced Blockchain has a longstanding and successful track record of investing in ventures. We have now sharpened and enlarged our strategy for venture investing and increase our exposure to specialized funds in the space.
An example of this widened venture investment strategy, is our high 6-figure investment into Permanent Ventures back in 2021. Permanent Ventures is a fund focused on investing in decentralized applications in the Arweave ecosystem.
At present, there is no lasting and secure solution for permanent data storage, which Arweave aims to solve. Our team of research associates and advisors identified the potential of Arweave early back in 2020 and we decided to double down on our investment in Arweave by supporting the Permanent Ventures team in their vision to provide capital to decentralized applications in its ecosystem.
To date, Permanent Ventures has placed multiple early-stage investments in the wider Arweave ecosystem and we are proud to announce that the fund has already reached a combined performance of 169% since its inception. We at Advanced Blockchain are committed to providing our shareholders access to this unique early-stage deal flow and therefore want to take this opportunity to elaborate more on our investment thesis as well as new developments in some of our other portfolio companies.
Recently, Obol raised a $12.5m Series A co-led by Pantera Capital and Archetype to accelerate the deployment of Distributed Validator Technology, a core technology on the Ethereum scaling roadmap that improves resiliency and decentralization. Advanced Blockchain participated in the Obol Labs seed financing round with a 6-figure investment back in 2021. The Series A round substantially increased the company value.
With our extensive industry knowledge and experience, Advanced Blockchain is well-positioned to support institutional investors in their due diligence process and help drive innovation and growth in the crypto space. We plan to expand this strategy internationally as we see more and more investors entering the space looking to receive help from partners with deep industry knowledge.
AB Capital (Advanced Blockchain Capital) will continue to be our in-house think thank and research partner to help institutional investors with their asset allocation and investment thesis. We expect to see a steady income flow by receiving a share of the management fee as well as recurring performance fees beyond 2023. The company has started to engage with partners who can help in growing AB Capital across our core markets and building it into a well-established partner for institutional investors. More info will follow shortly.
2. Change in board with a focus on international diversity
As previously communicated, Advanced Blockchain recently took the chance to comprehensively restructure and streamline operations, focusing on expanding our presence in other capital markets in the long term - an initiative led by our CEO, Simon Telian. This process was successfully executed, resulting also in the departure of our former chairman, Sam Winkel, and board member Marcus Deetz. The company thanks both former board members for their extensive support during this important phase.
To support in our international expansion strategy, we are happy to announce the appointment of industry expert Dr. Olav Sorenson as our new chairman.
Olav holds the Joseph Jacobs Chair in Entrepreneurial Studies at the Anderson Graduate School of Management at UCLA and brings a wealth of experience in venture capital strategy and entrepreneurial venture initiation to the table. He is poised to bring valuable insights and guidance as we continue to grow and thrive in the dynamic crypto industry and develop new revenue streams.
It is intended to propose two more board members for the next AGM. More info will follow shortly.
3. Unbonding Polkadot and redeployment of capital
In light of recent market developments such as Kraken closing down its staking services for US-citizens and to finance new investments, we have decided to update our initial staking strategy, and have unbonded and sold our Polkadot stake. With this recent investment in Polkadot and the very profitable staking strategy we were able to secure a 6-figure profit in just a few months. This is further evidence of our repeatedly successful execution of our investment strategy, giving our investors unique short-term as well as long-term exposure to listed and unlisted ventures in the space.
We have allocated additional capital and believe that there is significant upside potential in our existing portfolio companies and in the Composable Finance ecosystem. As mentioned during last year’s Eigenkapitalforum in Frankfurt, we have decided to double down on some of our existing projects and increase our exposure.
Research has always played a key part of Advanced Blockchain’s investment strategy and we showcased this by placing multiple early-stage investments in the past couple of years. Some of these projects are now rapidly maturing and we are proud to see them grow.
The monthly portfolio update is a first step to keep our investors informed about recent happenings in our portfolio companies. We are planning to expand our portfolio update within the next couple of months and be more transparent about new developments – and ultimately their implications for Advanced Blockchain and our group of companies.
4. Next Steps
New investments and the expansion of our board highlights the importance of international and diverse perspectives in the crypto industry. As the industry continues to grow and mature, a broader range of expertise and perspectives will be needed to drive innovation and growth in the sector.
In light of the growing institutional interest in the web3 space, Advanced Blockchain recognizes the importance of providing support to institutional investors during their due diligence process. Our company has built a strong reputation for providing valuable industry expertise and insights, rooted in our long track record in the field.
In line with our promise to communicate more transparently with shareholders, we would like to take a moment to acknowledge some doubts within our investor community about our investment – together with Rarestone Capital – in Composable Finance. As you all know, we have a number of well-known co-investors on our side, e.g. Coinbase or GSR. And we would like to take this opportunity to share with you that Composable is well on track with its product roadmap and making solid progress towards its mission of building a better, more connected, and trustless DeFi future. We are confident that the team will continue to meet its roadmap milestones. Composable Finance recently secured $32m in a Series A on a combined valuation of $400m.
As we streamline our organization to become more effective and flexible, our Head of Research will now focus on Panoptic – a company shaping the next big revolution in Decentralized Finance creating DeFi-native, oracle-less perpetual options (XPOs) and that was founded by him just recently.
Last but not least, we have started to engage with partners who can help us evaluate our (unlisted) digital assets and include them in the overall portfolio evaluation. We want to take this opportunity and let our shareholders know that this is a complicated procedure where a variety of different valuation methods (e.g. benchmarking, peer group analysis and others) need to be considered. This is a lengthy procedure which needs to be fully accepted by auditors before the company would be able to publish a frequent portfolio evaluation.
Thank you for your continued support of Advanced Blockchain. If you have any questions, please do not hesitate to reach out to us.
The Advanced Blockchain Team