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Founded late 2020 by Nicolas Priem, Michiel Lescrauwaet and Patrick Van de Mosselaer, Tioga Capital is a Luxembourg based venture capital fund that is dedicated to backing exceptional European Web3 entrepreneurs. The team currently consists of 8 individuals based in London, Lisbon, and Brussels investing out of a +$90M fund.
The fund writes $500k-$5M tickets in startups at the pre-seed up to Series A stages, with a focus on (i) DeFi, (ii) Creator economy and NFTs, (iii) Blockchain infrastructure and security, and (iv) Compliance verticals. At the core, we back exceptional entrepreneurs and blockchain protocols that bring us closer to a world of more individual sovereignty, trust, and privacy.
As Nicolas and Atul (Technical Advisor) drove along the Tioga Road, winding through the stunning scenery of Yosemite National Park, their minds were also wandering.
Both avid rock climbers, the two had come to the park to tackle some of its famous peaks, but they were also beginning to contemplate starting a fund to back exceptional Web3 entrepreneurs in their personal networks.
As they passed a sign for the Tioga Pass, Nicolas remarked on the name’s interesting meaning. In the Iroquoian language of the Mohawk people, “Tioga” meant “junction” or “fork”. It was a fitting name for their potential fund, as the world of crypto was constantly forking and evolving, with new ways separating from the old.
With that idea fresh in mind, in 2018 Nicolas met fellow Belgian, Michiel, who had been participating in the industry for 6 years by then. The complementarity clicked right away and the rest was history.
Nicolas and Michiel are managing partners at Tioga Capital and Atul, a cryptographer by trade, is a technical advisor to the fund.
Imagine a world where access to traditional finance products is democratised through the power of DeFi apps. These apps act as a “universal API”, enabling seamless connection to all other apps and atomic composability. Lower switching costs ignites fierce competition and innovation, resulting in efficiency gains.
We foresee a rapidly approaching future where traditional finance products (so-called “Real World Assets” or “RWA”) – such as bonds, treasuries, and emerging market credit – are put on-chain to participate in on-chain finance.
There will be large efficiency improvements in underwriting processes, issuance processes, and cross-border remittances. This shift will democratise access to financial products, enabling US/EU funds to effortlessly invest in emerging market credit and empowering individuals in emerging markets to access US treasuries and the USD like never before.
Tokenised securities allow for self-sovereignty, giving users the option to fully own and control their digital assets and engage in peer-to-peer transactions without relying on intermediaries. This democratises financial systems and empowers individuals to interact directly with their assets in the age of the internet of value.
The beauty about specialised DeFi applications lies in their flexibility to cater directly to consumers or integrate with consumer-facing apps. As we move into this inevitable future, fintech companies like savings apps will be able to integrate with DeFi dApps to offer financial products with different credit risks to provide yield to their users.
The financial landscape is rapidly evolving. And we are here to accelerate that change. This is why we invested in PV01.
Examples: One-click access to all apps, tokenised debt, DEX/marketplace aggregators
Blockchains at their current state are ill-equipped to accommodate the next billion users. To address this, we must improve cost and scalability with the goal of achieving infinitethroughput, while simultaneously simplifying UI/UX to make it feel no different than traditional apps.
In the future, using a Web3 dApp will feel as seamless as using your everyday banking app, eliminating the need to remember seed phrases or pay high gas fees during periods of congestion.
As DeFi apps continue to gain traction, security becomes an ever more critical concern. With an alarming +$6B of crypto lost due to hacks, we must urgently develop advanced security measures to combat increasingly sophisticated cyber threats. These include better exploit detection, prevention and retrieval mechanisms.
DeFi’s composability is a double-edged sword. While DeFi’s money legos facilitate more sophisticated transactions, they also increase the number of interactions with external and potentially untrusted code. These increasingly complex DeFi interactions pose a challenge to protocol security, as a breach in one protocol may have far-reaching consequences on others.
The prevailing market is filled with auditors employing an agency model, leading to excessive fees for audits since such models struggle to scale effectively. We envision a future dominated by platform solutions that facilitate continuous monitoring, early detection, and quick hack responses, offering comprehensive risk management tools for the protocols that power the world of DeFi.
Our vision is to create a future where blockchain technology is not only efficient and accessible but also secure and resilient in the face of evolving threats. This is why we invested in Chaos Labs.
Example: App-chains, rollup-as-a-service, account abstraction, agent-based economic simulations, automated risk management
As Web3 is currently navigating a regulatory grey area, it stands on the cusp of a significant transformation. EU’s MiCA (Markets in Crypto Assets) framework, set to take effect in 2024, will act as the “MiFID of crypto”, regulating all parties involved in the use and issuance of crypto assets.
MiCA’s implementation will harmonise the regulatory landscape across EU jurisdictions. This change will usher in a new era for crypto where stakeholders should be protected better, market abuse should be prevented, and the overall legal certainty should increase materially, serving trust and further adoption in turn.
Further legislation is anticipated, with the noteworthy inclusion of DAC8 (Directive on Administrative Cooperation), which will strengthen information exchange among EU tax authorities and increase regulatory oversight on crypto taxation.
This wave of regulation, led by the EU’s proactive approach (e.g., in comparison to the US) will generate strong tailwinds for compliant institutional solutions and crypto tax software in Europe. Institutions will require compliant infrastructure that seamlessly integrates with their existing tech stack.
Regulation is coming. Those that are well positioned will benefit the most.
Examples: Tax reporting, KYC/AML tooling, institutional compliance solutions
By harnessing the power of NFTs and other Web3 primitives, creators can break free from the confines of intermediary platforms like Facebook, Instagram, and Patreon. This also allows them to forge direct relationships with their communities, slashing the exorbitant fees charged by social networks (from 40-45% to a mere 0-10%).
Traditional brands are jumping on the NFT movement to create a direct connection with their fans and offer premium perks akin to limited edition club cards. These include Porsche’s 911 NFTs which grant exclusive event access, Starbucks’ Odyssey Web3 rewards programme which grants certain perks, and Nike’s acquisition of digital fashion brand RTFKT.
Moreover, these technologies offer additional benefits, such as seamless interoperability between platforms through protocols like Lens. This innovation empowers multiple social platforms to instantly bootstrap their user base, as users effortlessly port their social graph across apps. Developers also reap the rewards of an enhanced experience by leveraging the Lens back-end.
NFTs revolutionise financial transactions between content creators and their communities. For example, a music catalogue owner can directly pay royalties to the NFT holder’s wallet, streamlining the process.
It is crucial to understand that NFTs need not be expensive nor limited in quantity. They represent a universally accepted file format for token-gating, delivering utility, or acting as a receipt for a specific position in an options protocol or liquidity pool.
The time for content creators to seize control is now.
Examples: Brand-consumer relation platforms, NFT ticketing, content monetisation
Currently, we have welcomed 15 exceptional teams into the Tioga family, and are excited to continue partnering with more teams to bring forward their visions for the future.
If you are building in Web3 and planning to change the world, feel free to reach out to us (firstname.lastname@example.org).