SEI takes the baton from MOBILE—has Multicoin's investment thesis returned?
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SEI takes the baton from MOBILE—has Multicoin's investment thesis returned?
Is the once-popular Multicoin investment concept making a comeback?
Navigating Web3 tides with focused insightsAuthor: Kaori
If we were to name one asset besides Bitcoin that surprised investors in 2023, Solana would undoubtedly be on the list. Gradually recovering from the FTX collapse, Solana has re-entered the top five by market capitalization. And it’s not just SOL holders who have reason to celebrate—Multicoin Capital does too.
As an early investor in Solana, Multicoin Capital earned substantial returns during the 2021 bull run, and its thesis-driven investment approach became widely admired. However, a series of setbacks caused Multicoin’s assets under management (AUM) to plummet, with only a quarter as many investments made in 2023 compared to previous years. Yet, as crypto markets rebounded at the end of last year, many assets in Multicoin’s portfolio—including Helium Mobile (MOBILE) from the DePin sector and the new Layer 1 Sei (SEI)—saw significant price increases.
This resurgence raises an important question: Is Multicoin Capital’s once-popular investment philosophy making a comeback?
Multicoin Capital Portfolio Assets Rally Together
In December last year, Helium Mobile’s token MOBILE surged nearly tenfold within a week, reigniting interest in the DePin sector.
Helium has long-standing ties with Multicoin Capital. In June 2019, Helium raised $15 million in a Series C round led by Multicoin Capital and Union Square Ventures. In August 2021, Helium secured another $111 million through a token sale, led by a16z, with participation from Multicoin Capital, Alameda Research, and others.
Helium’s native token HNT soared from less than $0.20 mid-year to a peak of $52 in 2021, becoming one of Multicoin Capital’s best-performing investments that year. In July 2022, the Helium Foundation introduced a new token, MOBILE, to reward 5G hotspot operators and expand Helium’s 5G coverage. Tushar Jain, co-founder of Multicoin Capital, even published a detailed thread explaining the differences between MOBILE and HNT. At the time of writing, MOBILE was trading at $0.0035, up 27.9% over the past 24 hours.
When discussing the DePin space, another project backed by Multicoin Capital worth mentioning is Hivemapper. Hivemapper is a decentralized, continuously updated map built by users with dashcams. This emerging map economy represents a fundamental shift in how people own maps and share economic benefits with those contributing to global mapping.
In April 2022, Hivemapper announced an $18 million funding round led by Multicoin Capital, with participation from Solana’s founder, former Apple Maps executives, and the CEO of Helium. On January 4, Coinbase added Hivemapper’s token HONEY to its listing roadmap. Subsequently, HONEY briefly spiked to $0.26, marking an 85.2% increase within 24 hours.
Since December last year, another standout investment from Multicoin Capital has been Sei (SEI). After a broad market selloff on the evening of January 3, SEI briefly broke above $0.82 and was trading at $0.77 at the time of writing.
Sei, a next-generation Layer 1 blockchain, attracted attention since its mainnet launch this past August due to its strong backing, including Multicoin Capital, which built its reputation on public chain investments. In August 2022, Sei Labs raised $5 million in a seed round led by Multicoin Capital, with participation from Coinbase Ventures and GSR. In April 2023, Sei announced a $30 million raise at an $800 million valuation, with investors including Multicoin Capital and Jump Capital.
In late November last year, Sei announced plans to adopt parallel EVM technology for its v2 upgrade—an innovation that several research firms believe will be a key narrative in 2024. If SEI maintains its current momentum, it could become another high-return investment for Multicoin.
Another recent gainer in Multicoin’s portfolio is the perpetual futures protocol Perpetual Protocol. As of January 3, PERP, the protocol’s native token, reached a high of $2.10, surging over 60% in 24 hours.
In August 2020, Perpetual Protocol raised $1.8 million in a round led by Multicoin Capital. Kyle Samani, co-founder of Multicoin, wrote extensively about the project, praising its hybrid model that combines CeFi-style leverage—desired by perpetual traders—with DeFi’s AMM-based liquidity and ease of use.
After reviewing these recent price movers in the Multicoin portfolio, we must also revisit Solana—the investment that once propelled Multicoin Capital to greatness.
The Rise and Fall of Multicoin Capital
According to Axios’ report on December 30, 2021, since its inception in October 2017, Multicoin’s hedge fund had surged 20,287%. Its first venture fund returned over 28x net of fees to LPs, with top performers including Solana, Helium, and Arweave.
In May 2018, relatively unknown Solana Labs sold 79.25 million tokens at $0.04 each—Multicoin Capital was among the buyers. In 2019, Solana conducted five funding rounds, four of which were private sales. These private rounds began in Q1 2019 and concluded in July 2019, when Multicoin led Solana Labs’ $20 million Series A. In June 2021, Multicoin participated in Solana’s $314 million fundraising round.
During the 2021 bull market peak, Solana’s price approached $260, and its market cap briefly ranked third globally in September 2021. By the end of 2021, SOL had appreciated approximately 21,609% since its April 2020 launch, while HNT rose from under $0.20 to a high of $52. These figures reflect only secondary market gains; Multicoin’s actual profits as an early institutional investor were far more substantial.
Solana TVL chart; Source: DeFiLlama
Thus, Multicoin’s three investments in Solana delivered unmatched returns among crypto VCs that year.
In May 2021, Multicoin raised $100 million for its second venture fund and $250 million for its third. By September that year, Kyle Samani revealed on an FTX podcast that Multicoin’s AUM had reached $4 billion. As portfolio token prices continued to climb, even traditional VCs like a16z and Sequoia began restructuring to hold more digital assets.
Unlike Alameda or 3AC, known for technical and arbitrage strategies, Multicoin adopted a “thematic investing” approach from day one. Founders Kyle Samani and Tushar Jain consistently published essays outlining the rationale behind each investment, boldly backing contrarian projects and going all-in during periods of market skepticism—a strategy romanticized after their success with Solana.
But what brought glory also brought downfall. The 2022 FTX collapse severely impacted Solana, driving its price into single digits. Multicoin lost roughly 55% of its AUM in about two weeks. Beyond the 9.7% of assets held by FTX, losses stemmed from its long-standing bullish stance on Solana and its ecosystem assets such as Mango Markets, equity in FTX.US, and unsettled derivatives contracts.
At the end of December 2022, Soldman Gachs, known for disclosing information as a Three Arrows Capital creditor, tweeted that he had received his November investor statement from Multicoin Capital showing a staggering 90% decline over the prior 11 months.
In March 2023, Multicoin disclosed in its annual investor letter that its hedge fund lost 91.4% in 2022—the worst performance since its founding. Recently, Kyle Samani and Tushar Jain informed LPs that approximately 10% of Multicoin’s AUM remains trapped on FTX awaiting withdrawal.
Thus began Multicoin’s quiet period. According to RootData, Multicoin made only 10 investments in 2023—fewest among major crypto VCs. In contrast, it invested in 41 projects in 2021 and 40 in 2022.
Comparison of 2023 investment counts among major crypto VCs; Source: Rotodata
However, with SOL’s price recovery, renewed vitality in the Solana ecosystem, and the emergence of new chains like Sei, Multicoin’s portfolio is experiencing a revival. According to Crunchbase, Multicoin has raised a total of $605 million to date. Whether 2024 will bring another Solana-level return remains uncertain—but we can proactively explore projects in the Multicoin portfolio that haven’t yet seen major token price breakthroughs, positioning ourselves to identify the next bull run’s dark horses.
Which Other Multicoin Investments Are Worth Watching?
In an interview with Blockcrunch, Multicoin Capital co-founder Kyle Samani explained his pre-investment process: “We spend more time analyzing market structure—understanding how the market works and what levers the team can pull.” This deep structural analysis is precisely what enables Multicoin to pick winners among early-stage projects. Below, BlockBeats highlights several promising investments from its portfolio. Readers can explore more via Multicoin Capital’s official website.
Jito Labs (JTO)
On August 11, 2022, Jito Labs, a liquid staking protocol in the Solana ecosystem, completed a $10 million Series A round led by Multicoin Capital and Framework Ventures. Participants included Alameda Research, Solana Ventures, Delphi Digital, Robot Ventures, Anatoly Yakovenko (co-founder of Solana Labs), Armani Ferrante (founder of Coral and former Alameda engineer), and Austin Federa (communications lead at the Solana Foundation).
Jito Labs aims to enhance transaction speed and finality on Solana while rewarding validators and stakers. In November 2023, Jito launched its governance token JTO through a retroactive airdrop.
According to CoinGecko, at the time of writing, JTO was priced at $1.50, with a market cap of $181 million and an FDV of $1.57 billion, ranking #246.
Worldcoin (WLD)
Worldcoin needs little introduction—it aims to provide digital identity verification for humans in the AI era. In October 2021, Tools for Humanity, Worldcoin’s developer, raised $25 million in a Series A round with participation from Multicoin Capital and Three Arrows Capital. In May 2023, Worldcoin closed a $115 million Series C led by Blockchain Capital, with a16z, Bain Capital Crypto, and Distributed Global participating.
In December last year, Worldcoin launched World ID 2.0, a digital passport, alongside a high-performance developer platform. According to CoinGecko, WLD was trading at $3.22 at the time of writing, with a market cap of $338 million and an FDV of $31 billion, ranking #164.
Pyth Network (PYTH)
On December 5, 2023, oracle project Pyth Network completed a new funding round with participation from Multicoin Capital and Wintermute Ventures. In November of the same year, Pyth initiated a retroactive airdrop, and its native token PYTH was involved in BackPack’s staking program.
According to CoinGecko, PYTH was trading at $0.28 at the time of writing, with a market cap of $418 million and an FDV of $2.78 billion, ranking #140.
Marginfi
Another notable Solana ecosystem project backed by Multicoin Capital is Marginfi. In February 2022, Marginfi, a Solana-based DeFi margin protocol, announced a $3 million raise led by Multicoin Capital and Pantera Capital, with participation from Sino Global Capital and Solana Ventures.
Currently, Marginfi has no official token launch plan, but the project runs a points program widely believed to serve as the basis for a future retroactive airdrop—readers are encouraged to participate and learn more.
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