VC invests $100 million in Web3 infrastructure

Emma Cui is a founder of web3 accelerator and Singapore-based VC fund LongHash Ventures. She transitioned to crypto after starting her career in banking and later moved to a role at McKinsey, which is where she met her co-founder. Cui is now on a mission to catalyze the growth of web3 with a $100 million Fund II that intends to invest in building better web3 infrastructure.

With the market down, Cui believes now is an optimal time for VCs to invest in companies that are building the foundation that will shape the future of decentralized finance (DeFi.) Over the next five years, she hopes to double down on projects that offers scaling solutions, cross-chain systems, and other tools that impact gaming, NFTs, the metaverse, and more. I spoke with Cui about her experience working as a woman in VC, what first sparked her interest in the crypto world, and why she’s so excited about the possibilities of her new fund II.

Amy Shoenthal: Tell me about your career journey and how you were introduced to the crypto world.

Emma Cui: It started with me buying ETH in early 2016 after I attended Vitalik’s meetup in Singapore. I was very fascinated by the concept of smart contracts and how decentralization can open up a world of possibilities.

Shoenthal: Do you mean to Vitalik Buterin, the ETH founder? Are you on a first name basis?

Cui: Yes, that’s the one I’m referring to. This was early 2016, and Vitalik was only 22 at the time. The meeting took place at the Singapore Management University SMU. There were only about 50 people in the crowd. I remember being mesmerized listening to him speak on stage.

The meeting made an immediate impact on me. I went home and started reading up on everything related to ETH. Figuring out cold storage and wallets was a huge pain back then.

That’s when I decided to look for a job in crypto. I started talking to crypto startups to see if I could find a good fit. Back then, there were very few non-technical people working in crypto and even fewer women, so I wasn’t able to find suitable opportunities. At the same time, McKinsey offered me a role as a management consultant, helping financial institutions launch digital attacker businesses, which gave me a foundational knowledge for my next role.

A year later, my ex-McKinsey colleague Shi Khai and I decided to launch LongHash Ventures. We have since grown to be Asia’s leading web3 accelerator and venture fund.

Shoenthal: You recently announced a $100 million Fund II. What types of investments do you want to make?

Cui: Our fund II’s main task is to focus on multi-chain infrastructure, especially around innovative Layer 1s (L1s), scaling solutions such as L2 rollups or cross-chain solutions, interoperability frameworks such as Polkadot and the Cosmos ecosystem, as well as important modular layers such as e.g. such as identity, privacy, data availability. We believe the current level of infrastructure is unable to support mainstream-scale retail-friendly applications, and therefore there are huge benefits to building and investing in robust infrastructure.

Shoenthal: Have you made any notable investments yet?

Cui: We have invested in many innovative projects such as Astar, Acala, Balancer, Lit Protocol, Parcel, Coinshift and Safe.

We have always believed in the multi-chain mission, which is why we were early investors in Polkadot. We worked with them to launch their first ever accelerator. Now we are also looking at Cosmos, cross-chain solutions such as Axelar and other rollup solutions such as zkSync.

We also recently invested in Saga, co-founded by Rebecca Liao and advised by Zaki Manian, the former director of Tendermint Labs. Saga wants to enable developers to more easily launch their own blockchain or app chain in the Cosmos ecosystem.

Shoenthal: What obstacles have you faced as a woman in crypto?

Cui: It’s true that there are subtle differences in how women and men are treated, and it’s not just in crypto. I have experienced both conscious and subconscious biases when it comes to getting people to buy into my ideas or feel heard. As women, we owe it to ourselves to make sure our opinions are heard. We have to punch above our weight.

We had an extremely difficult time raising funds during the 2018/2019 bear market. I was rejected countless times when we tried to set up our first fund. We had four people, and we accelerated 20 projects a year. At one point we only had two months of runway in the bank. Finally, the “DeFi summer” happened in mid-2020, and that’s when things finally started to take off.

Looking back, I think I did a few things right. First I networked strictly. I went to as many events as I could, did research and built a meaningful network. Second, I didn’t take no for an answer. I have been pitching Temasek for four years and they recently agreed to invest in our accelerator.

Shoenthal: Speaking of which, you’re one of the rare VCs who also runs an accelerator. Tell us more about the LongHashX Accelerator and the role you see it playing?

Cui: We were one of the first web3-focused accelerators when we started in late 2017, and now we are the leading web3 accelerator in all of Asia. We have built an extensive network and know-how to support early web3 projects in a systematic and scalable way.

We want LongHashX to take on the role of reliable “co-founder” for early-stage projects, not only supporting the transition of technical talent from web2 to web3, but always being at the forefront of web3 knowledge and innovation.

Shoenthal: What advice would you as an investor give to ambitious web3 entrepreneurs who want to start their own projects?

Cui: There is so much advice a new founder needs to build a successful project. Solve a big enough problem that you really care about. Look for co-founders or early team members who believe in the same vision as you. Most importantly, hustle hard.

Shoenthal: It was a big push to get in early, but then there was a dip. Can you talk about the dip?

Cui: This has been said a lot, but the best building happens during a bear market. The leading DeFi protocols today were built during the bear market of 2018 and 2019. There is less distraction and less noise, which means more room for experimentation. It is also the best time for VCs to invest because valuations are at more reasonable levels.

Shoenthal: How can we really build accessibility and diversity into web3 in all the ways we failed to in web2?

Cui: I think web3 has a real promise for accessibility and diversity. The entire web3 site is built around an open and permissionless system, where anyone can have access and can contribute at any time. There is a quote by Thomas Jefferson that says, “Eternal vigilance is the price of liberty.” I think the same applies to web3.