Tapiero, a veteran macro trader, created 10T in 2019 as a way for traditional investors to gain exposure to equity in crypto companies valued at more than $500 million. While such an investment may not yield the same 100x return as a venture capitalist looking to flip a coin, it is a less risky option for pension funds and endowments to have exposure to crypto’s upside.
“They’re comfortable with private equity and these companies—many of which have $100 million of revenue,” Tapiero told The Block. “They are businesses at scale with moats around them. There isn’t any risk that they will disappear.”
Kraken, Ledger, eToro, Huobi, and Figure are among the crypto companies in which 10T has invested. Investors have a strong desire for exposure to these types of vehicles. Shortly after launching its first fund, 10T DAE Expansion Fund, the company created a second one. Over the course of its two funds and co-investment vehicles, it has invested more than $650 million. About 80% of the capital in the firm’s second fund has been deployed.
The firm handles roughly $750 million in total.
The Municipal Employees’ Retirement System of Michigan and billionaire businessman Alan Howard are among the fund’s backers, according to Tapiero.
“Within six weeks of our valuation, Kraken had gone up 3 to 4 times,” Tapiero said. “eToro went up around 5 to 6 times. I’ve never seen anything like that.”
Indeed, the rise of 10T matches current crypto market tendencies. Large corporations can raise funds in a short period of time, raising their stock prices. Firms don’t necessarily require more funding in many ways, but the desire for huge investors to participate in crypto allows them to raise money.
According to Tapiero, over 70 crypto firms have a market capitalization of more than $1 billion, up from around 20 a year ago. NFT platform Opensea and trading services provider FalconX are two newbie unicorns.