Venture Capital Update: Cross-chain, Bitcoin layer-2, and institutional tools witness investor interest

Venture capital firms are capitalizing on the current bullish market trend. In March, Web3-native investment company Borderless Capital acquired quantitative trading firm CFT Capital, expanding its business to include artificial intelligence and proprietary trading products. Borderless aims to enhance capital deployment efficiency across Web3 verticals. The company currently manages $600 million in assets and has invested in Algorand, Blockdaemon, and Securitize, the latter of which is a partner of BlackRock in a tokenized digital fund.
The acquisition will also enable Borderless to establish a presence in Latin America. David Garcia, co-founder and managing partner of Borderless, stated that the company is actively exploring opportunities in Argentina, Uruguay, Brazil, Chile, and Mexico.
Looking ahead to 2024, Borderless expects cross-chain standardization to be the next development in the crypto space. Garcia believes that modularity in blockchains will continue to be a long-term trend, leading to the emergence of new L1s, L2s, and even L3s. He also emphasized the need for a Web3 aggregation layer that can interoperate across any chain for mainstream adoption.
Decentralized physical infrastructure (DePIN) is another area of focus for Borderless. Garcia believes that DePIN represents a new coordination and innovation paradigm across various industries, including communication, distributed computation, mapping, and transportation.
In this edition of Cointelegraph’s VC Roundup, several startups announced successful funding rounds in late March.
Morph, an Ethereum Virtual Machine (EVM) layer-2 solution, raised $20 million in angel and seed funding. The funding was led by DragonFly Capital and included participation from Pantera Capital, Foresight Ventures, The Spartan Group, and others. Morph plans to use the capital to attract talent, incentivize developers, and bolster marketing efforts. The blockchain platform focuses on decentralized sequencers, optimistic zkEVM integration, and modular design.
London-based Web3 decentralized AI startup FLock.io secured a $6 million seed round. The funding was co-led by Lightspeed Faction and Tagus Capital. FLock.io aims to decentralize AI agent training, fine-tuning, and inferencing while putting an end to user data collection. The startup believes that its Federated Learning-powered Training Platform will enable anyone to contribute knowledge and enrich AI models, resulting in community-owned models with more use cases.
Keyring Network, a platform that leverages zero-knowledge technology for digital asset compliance, raised $6 million in seed funding. The funding was co-led by Gumi Cryptos Capital and Greenfield Capital, with support from other investors. Keyring’s asset-level solution addresses regulatory compliance and market liquidity for financial organizations, allowing private data sharing and identification of qualified participants for secondary market tokenized transactions.
Crypto perpetuals exchange Rails raised $6.2 million in a seed round led by Slow Ventures, Round13 Capital, CMCC Global, and Quantstamp. Rails offers self-custody trading of perpetual contracts and aims to provide a more efficient and secure trading environment. The platform uses smart contracts powered by zero-knowledge proofs.
BOB (Build on Bitcoin), a hybrid layer-2 solution, raised $10 million in a seed funding round. The funding was led by Castle Island Ventures and included contributions from other investors. BOB plans to launch the first Bitcoin layer-2 with Ethereum Virtual Machine (EVM) compatibility, making it easier for decentralized applications (DApps) to be built on the Bitcoin network. The startup also formed a strategic partnership with Anduro to collaborate on a Bitcoin layer-2 solution for institutions.
Tokenization platform RACE raised $5 million to support its recently released testnet. RACE enables the tokenization of various assets for accredited and institutional investors. The platform plans to establish Decentralized Investment Committees (DICs) composed of industry experts to conduct due diligence on potential opportunities. The funding round investors were not disclosed.
In other news, the Crypto’s Artificial Superintelligence Alliance is focused on creating “good” AGI (Artificial General Intelligence) that is safe and beneficial to humanity. The alliance aims to address the potential risks associated with AGI development.