Coinbase bet bears fruit for Vancouver investor Version One
Since Version One invested in the crypto exchange, its valuation has grown more than 5,200%.
Boris Wertz was the co-founder of Victora-based AbeBooks, a marketplace for books that Amazon acquired in 2008. In 2012, he launched Version One Ventures, a venture capital firm that invests in early-stage companies.
When it comes to investing, he’s written that his firm’s sweetspot is to invest in early-stage, North America-based startups that leverage network effects. “When we’re pitched with opportunities that are outside this focus,” he wrote in 2018, “it’s usually a quick no.”
Yet, he’s also not afraid to mix things up, to make an exception to his investment scope, if an extraordinary opportunity calls for it. Back in 2017, he came across one such opportunity: crypto exchange Coinbase.
Wertz invested in Coinbase in 2017 as part of the startup’s $100 million Series D funding led by IVP and other venture heavyweights including Spark Capital, Greylock Partners and Draper Associates. “It was a much later stage for us than our typical pre-seed/seed investment,” he wrote on his firm’s blog.
At the time, the funding gave the digital currency exchange a post-money valuation of $1.6 billion.
Today, Coinbase went public through a direct listing, opening with a market cap of over $100 billion, and closing the day at around $85 billion. It’s one of the largest public listings ever in the U.S.
For Version One, the “investment ended up as a multiple fund maker,” according to Wertz.
Version One shouldn’t have been at Coinbase’s cap table; so, what compelled Wertz to stray from his lane? He wrote that there were three reasons. Firstly, he had specific views on why blockchain/crypto were the next major computing platforms; secondly, Coinbase had emerged as "the clear category leader” within wallets and exchanges, with moats in the form of a polished brand and killer UI, among other factors, and; thirdly, even though Coinbase was at a Series D valuation, he still believed the startup had the potential to “pay back the whole fund.”
As of this writing, Coinbase’s valuation has grown by more than 50x since Wertz and co. made their investment. “Looking today at Coinbase and crypto in general, our thesis has played out in the way we hoped it would,” Wertz reflected.
“Coinbase is the most recognized brand for crypto exchanges and the clear category leader serving both retail and institutional crypto investors,” he says.
However, he believes it’s still day one in crypto.
But despite all of the progress that we have seen in crypto over the last few years, it is important to remember that crypto is still in its infancy. Relative to how the Internet developed, we might only be in 1997/98. So, the best is yet to come – for both crypto as an industry and Coinbase as an iconic company in this space.
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