USV to boost investments in Web3 sector despite regulatory pressure

Fred Wilson’s Union Square Ventures (USV) plans to increase investments in Web3-sector amid rising regulatory pressure from US authorities.

“When [the authorities] ban, I double down. The most powerful technologies spread waves of fear among the establishment. When you see that fear in their eyes, invest in its cause,” Wilson wrote.

Back in 2014, the New York State Department of Financial Services (NYDFS) sued USV over the firm’s investment activities. At the time, the head of the firm noted that the difference between the United States and China lies in the United States’ respect for freedom of innovation.

REMINDER: ANYTHING THAT CHINA BANS, INVEST IN!@fredwilson @cameron @tyler @BarrySilbert @Winter #Bitcoin pic.twitter.com/LGtDYef7U7

— Mr.Buidl?? (@MrBUIDL) May 21, 2021

“Invest in anything that China bans,” he said during a speech.

USV has long sponsored Web3 startups. The firm’s first crypto deal in 2013 was funding the Coinbase exchange. The organization then supported more than 25 projects in this space, including Uniswap, Polygon and Helium.

In 2021, USV announced plans to invest about 30% of its $250 million fund into the cryptocurrency industry.

Despite a challenging 2022, USV attracted $625 million for its two venture funds.

In January 2023, Wilson said that Web3 investors would need “a very strong stomach and a long time horizon,” despite the allure of prices during the bear market.

In the first quarter of 2023, venture investments in crypto startups across 353 funding rounds stood at $2.6 billion, the lowest figure in three years.