C1 Fund Targets Bargains In Australian Crypto Market, Offers Up to 80% Discounts

The C1 Fund, a substantial $760 million pool of capital, aims to find affordable­ opportunities in Australia’s crypto market. It focuses on firms previously valued above $300 million. Backed by e­x-Coinbase legal expe­rts and financiers, the fund is looking to acquire se­condary shares from current shareholde­rs. They’re proposing discounts betwe­en 50% and 80%.

According to a pitch deck from The Australian Financial Review, C1 Fund believes that the digital assets market is undervalued due to the current market conditions, such as hyperinflation and rising interest rates. The fund aims to write cheques between $US20 million and $US50 million for each deal, focusing on crypto companies at the Series C stage or later.

The cryptocurrency sector has seen a resurgence of interest in recent months, with bitcoin surging above $US40,000 for the first time in two years and other cryptocurrencies following suit. However, some crypto companies have struggled to maintain their valuations in the private market, creating opportunities for bargain hunters like C1 Fund.

C1 Fund’s Bold Moves In Crypto Investments

One of the companies that C1 Fund has approached is Animoca Brands, a Hong Kong-based blockchain gaming company that was delisted from the ASX in 2020 for swapping stock for crypto tokens.

Since then, Animoca has grown into a $7.8 billion private company, with backing from Sydney-based Koda Capital and KTM Ventures. The company’s shares were sold at around $4.50 in its last capital raise, but C1 Fund has offered to buy them at around $1.12, a 75% discount.

Another target is Chainalysis, a US-based company that provides blockchain analysis and investigation services for businesses and law enforcement agencies. Chainalysis was valued at $US8.4 billion in 2022, but C1 Fund has claimed that $30 million of secondary preferred shares are available at $US15 a share, a 63% discount.

However, not all crypto companies will sell their shares at such low prices. Immutable, a Sydney-based crypto gaming developer that has raised almost $400 million in venture capital, has said that C1 Fund has not contacted it or its investors to buy secondary shares.

Immutable was valued at $US2.5 billion in its last Series C round, and its last secondary sale involved US-based venture firm PrinceVille buying shares at the same valuation.

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