Cake DeFi Baking Deals With New Corporate Venture Arm

The global fintech platform Cake DeFi has some sweet funding news for tech companies.

The Singapore company launched Cake DeFi Ventures, a $100 million venture arm aimed at accelerating growth of tech firms. 

The focuses: Web3, the metaverse, nonfungible tokens, gaming, esports and fintech.

“In order to become a baker, you have to stop looking for answers and just bake some Cake,” the company tweeted on Friday.

‘Just Bake Some Cake’

Decentralized finance, or DeFi, aims to offer financial services without intermediaries. In the traditional financial system, the banks are the main depositories of funds and guarantee exchanges of funds. With DeFi, users keep their funds in their personal wallets. Transactions are made directly from user to user via the blockchain and digital contracts (called smart contracts) created by specific apps.

Cake DeFi has more than $1 billion in managed customer assets. CDV is led by Cake DeFi’s co-founders, Julian Hosp, who is chief executive, and U-Zyn Chua, chief technology officer.

The fund has led its first investment, a media, events and tech venture called the Edge of Company.

“By launching Cake DeFi Ventures, we strive towards bringing cryptocurrency and blockchain capabilities to the world,” Hosp said in a statement. 

“With Cake’s current status as Singapore’s and Southeast Asia’s fastest-growing platform, projects which we invest in can expect to receive strong support scaling globally.”

U-Zyn said that “investing in companies that bring synergies to Cake DeFi’s core business will allow us enhance our Web3 offerings.”

‘Roadmap for This Rocketship’

Last month Hosp, a former professional kitesurfer, said in a blog post that Cake DeFi had managed to almost double its confirmed users in the fourth quarter and to grow its users 10-fold over 2021.

He said the company increased customer assets in the fourth quarter despite a drop in cryptocurrency prices, and boosted customer assets sixfold over last year.

Looking ahead to midyear, Hosp said Cake DeFi would have roboadvisership functionality for several DeFi-focused blockchain ecosystems.

“We want to 10-fold our customer assets, which could put Cake DeFi on track to be worth at least $10 billion by this point,” he said.

Hosp said the long-term goal for the decade will have Cake DeFi becoming “the world’s leading investment platform into DeFi and up-and-coming alternative assets.”

“If the roadmap for this rocketship doesn’t excite you, I am not sure what will,” Hosp said. “2021 was already mind-blowing, and 2022 will put Cake DeFi onto the global investing landscape.”

In 2021, venture capitalists invested more than $33 billion into crypto and blockchain startups, making this a milestone year, according to a report by bitcoin firm Galaxy Digital.

‘A Founder-Friendly Environment’

Valuations in the crypto/blockchain space were more than double (141% higher than) those of the rest of the venture capital space in the fourth quarter, the report said, “highlighting a founder-friendly environment and the intense competition among investors for deal allocations.”

Earlier this week Bain Capital Ventures, the VC arm of Bain Capital, launched a $560 million fund focused on the cryptocurrency space.

Bain Capital’s Crypto Fund I will focus on investing in early-stage cryptocurrency protocols operating in DeFi and Web3 categories, according to Bloomberg.

In February, California venture capital firm Sequoia committed close to $600 million to become a more active investor in crypto.

The Sequoia Crypto Fund is one of the first subfunds to invest out of the firm’s new capital structure, Sequoia Capital Fund, the company said.

VC firm Andreessen Horowitz has investments in crypto investing app CoinSwitch, crypto and Web3 infrastructure company Alchemy, privacy focused blockchain app Aleo, and blockchain startup Solana Labs, which is developing technology used in DeFi, among others.