Coinbase are to provide finance to early stage companies that show promise of enhancing the cryptocurrency ecosystem in a “positive and meaningful way.”
Emilie Choi, Head of Corporate, Business Development and Business Opportunities at Coinbase, announced in her most recent blog post that they will form Coinbase Ventures to handle the initiative.
“Encouraging the Crypto Eco-system”
Choi states that unlike other corporate venture programs, Coinbase Ventures will not need to formalise partner relationships with projects they invest in as the “goal is simply to help the most compelling companies in the space to flourish.”
No market sector focus or business requirements were mentioned although the boundaries could be seen as almost limitless as Coinbase Ventures “may be comfortable investing in companies that are potentially competitive, because it’s in everyone’s interest to see the ecosystem innovate.”
Despite the stated good intentions and welcome investment, initial public reactions away from the blog forum have been mixed as investing in a competitive business naturally raises issues of governance and influence. One observer commented that “one of the underlying problems with commerce currently is the hidden monopolies that operate behind a facade of multiple choice; the blockchain was supposed to change that.”
The concern may be premature, however, as it is unclear at this stage to what conditions, if any, Coinbase Ventures attach to their investment criteria but these types of questions would need to be asked by any startup seeking funding.
While cryptocurrencies have recently been in a corrective phase, Coinbase are one of the companies who have accelerated their penetration into the market and last month announced their own Cryptocurrency Index Fund.