RIT Capital Partners Plc, a £3.6bn ($4.6bn) British investment company, lowered the value of investments in several high-profile crypto startups earlier this year.
The trust, founded by Jacob Rothschild, had invested tens of millions of pounds in crypto companies since 2021, in addition to backing numerous tech startups. Are annual report 2021 shows positions of £27.8 million, £33.2 million and £20.8 million respectively in Animoca Brands, Kraken and Paxos. In accounts for the following yearpublished in February, those positions had shrunk to £14.2m, £16.2m and £16.2m.
It’s possible that some of RIT’s stakes have been sold, but unlikely given that the three startups in question are privately owned.
In a note to the 2022 accounts, RIT Chairman Sir James Leigh-Pemberton wrote: “In 2020 and 2021, private investment contributed approximately 34% to total NAV… In 2022, the sharp correction in public markets, and particularly technology markets, has led us to write off some of this significant gain.”
He also wrote that RIT’s private investments “are by nature multi-year investments, which we are not forced to sell to fund redemptions.”
RIT, Kraken and Paxos did not immediately respond to a request for comment. A spokesperson for Animoca Brands declined to comment.
The sell-off of crypto startups
The news comes amid a broad reset in how investors value crypto startups, and indeed tech startups in general, following a period of lavish venture capital investment in 2021 and 2022.
Yesterday, London-based Molten Ventures Plc devalued his bet in Revolut, the fintech and crypto business, and crypto security company Ledger with 40% and 22% respectively. Revolut was valued at a gaudy $33 billion when it last raised money in mid-2021.
In March, The Block reported that shares in numerous private crypto startups were being offered at significant discounts on Birel.io, a platform that specializes in secondary market transactions. Those startups include Alchemy, Blockchain.com, Chainalysis, Kraken, ConsenSys, Blockdaemon, CoinDCX, and OpenSea. The discounts offered were in some cases up to 74%.
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