Cryptocurrency venture capital firm Variant has raised a new $222 million fund, planning to continue investing in the earliest-stage projects and expanding its focus beyond early Web3 narratives to include "autonomous" applications that combine AI and crypto. Founder Jesse Walden stated that over the coming years, "crypto investing" will gradually become part of a broader category of internet and software investing.
New fund shifts focus to the intersection of AI and crypto
Walden told Fortune that Variant still upholds the investment thesis previously centered on blockchain and decentralization, but the industry landscape has changed, and the rapid advancement of AI has prompted institutions to adjust their focus. The new fund will continue to invest in the earliest-stage companies and provide ongoing support as projects grow.
The new core concept he proposed is "autonomy." According to him, this direction encompasses not only permissionless financial applications and crypto products, but also AI applications that give users greater control. Compared to the past, which emphasized the "Web3" concept, Variant now defines its investment scope more broadly.
The Web3 narrative is cooling, but DeFi is still seen as a success.
Walden believes that early visions of Web3 reshaping the internet have not truly materialized. Ordinary users have long faced complex cryptocurrency experiences, and the dominant positions of large platforms like Google and Meta have not been significantly weakened.
However, he noted that the decentralized concept has not been without output, especially in the financial sector. Uniswap and Morpho in his investment portfolio are considered representative examples. According to his assessment, these projects demonstrate that blockchain is better suited as foundational financial infrastructure rather than as a direct consumer-facing product.
- New fund size: $222 million
- Investment Stage: Primarily earliest-stage projects
- Representative holdings: Uniswap, Morpho
The blockchain is more like an underlying track.
Walden said that one of the major issues in the crypto industry over the past few years has been the external perception of cryptocurrency technology itself as the end product, when in reality it is more akin to “underlying infrastructure” or a transactional pipeline. As more financial activity moves on-chain, the growth potential for this type of infrastructure is only just beginning to be unlocked.
He also noted that crypto entrepreneurs' long-term experience in compliance, security, and attack-resistant systems may become even more valuable in the AI era, as businesses will increasingly need to handle blockchain-based payment and settlement processes, as well as talent capable of addressing security risks and regulatory pressures.
The AI era may reevaluate the value of open networks.
Walden believes that AI agents are increasingly participating in communications between enterprises and their customers, partners, and suppliers. In this environment, platforms' attempts to maintain control by blocking data interfaces may be less effective than before, as AI systems will turn to more accessible alternative channels.
In his view, this means that the ideas surrounding open networks and user control may regain practical relevance in the AI era. For Variant, this is also the primary reason for expanding its investment thesis from a single crypto sector to the intersection of AI and crypto.