Mike Novogratz, a colorful former Goldman Sachs partner and blockchain industry veteran, founded Galaxy in 2018 to bridge the worlds of traditional finance and crypto. After years of investing in digital assets startups using capital from its balance sheet capital, Galaxy is expanding its venture business through a $175 million fund. On Thursday, the company announced the final close of the fund, which exceeded its initial target of $150 million.
In an interview with Fortune, Galaxy general partner Mike Giampapa said the firm decided to grow its venture capital operations in order to broaden its bets into startups working on the growing intersection between traditional finance and crypto, including stablecoins and decentralized finance applications. “You’re seeing this fundamental shift from more speculative use cases of blockchains to something that’s much more…tangible,” Giampapa said.
While Galaxy has long been a major player in the crypto venture space, investing in startups such as the crypto custodian Fireblocks, Giampapa said the company decided to raise outside capital for a dedicated venture fund following the collapse of Sam Bankman-Fried’s crypto exchange FTX in 2022 and the subsequent downturn in prices. “Quietly, we had this stablecoin revolution,” he told Fortune. “While the industry was getting our feet underneath us again, it became obvious that we wanted to take our venture franchise to the next level.”
As a piece of Galaxy’s broader crypto operation, the venture fund has strategic overlap with other parts of the business, said Giampapa, such as helping connect them with its institutional customer base.
“We’ve had this thesis going back pretty much since Galaxy’s inception, which is we think these two worlds are colliding,” Giampapa told Fortune. “We want to invest at the earliest stages.”
