Understanding Crypto Venture Capital Borderless Capital: Founded on Algorand, Focused on DePIN

Before launching the $100 million DePIN fund, Borderless Capital, which focuses on the Algorand ecosystem, had already begun to pay attention to and lay out plans in the "DePIN" field.

Written by: Zen, PANews

Recently, Borderless Capital launched a decentralized physical infrastructure (DePIN) fund with a support amount of $100 million, with investors including the blockchain Peaq, which focuses on DePIN, as well as the Solana Foundation, Jump Crypto, and IoTeX.

The new fund is led by former Telefónica executive Álvaro Gracia and Helium co-founder Sean Carey, and is supported by first-layer blockchain Peaq, Solana Foundation, Jump Crypto, and IoTeX. Partner Álvaro Gracia stated, "DePIN will become the global standard for deploying physical infrastructure, coordinating human resources, and creating billions of dollars in passive income, while providing users with convenient access and lower costs."

Team Background

David Garcia, co-founder and managing partner of Borderless Capital, has deep experience in the technology and finance industries, having invested in Bitcoin, Ethereum, and other major digital assets since 2014. His career in the cryptocurrency industry began at the Bitcoin and digital payment startup Ripio (formerly Bitpagos), where he served as Senior Vice President responsible for driving new strategic opportunities and exploring new markets. Before founding Borderless in 2018, he was a partner at CAF, the first investment fund for crypto assets in Latin America, and during that time served as Managing Director of the global peer-to-peer credit network protocol RCN.

Arul Murugan is the chairman and founding managing partner of Borderless Capital, with over 20 years of entrepreneurial experience and more than 10 years of investment experience. He founded Oracle enterprise solutions provider Enrich in 2003, offering end-to-end Oracle ERP solutions covering procurement, supply chain, and finance, with operations across North America, Europe, and Asia. In 2015, Arul transferred Enrich's business to a large private equity firm. He then transitioned to venture capital, launching 11-11 Ventures in 2016, focusing on investments in blockchain and early-stage technology companies. In 2018, he co-founded Borderless with his Argentine partner David Garcia, whom he met in the Bahamas.

Álvaro Gracia is a partner at the Borderless Capital DePIN fund, focusing on accelerating the development of the DePIN ecosystem through investments in top projects. Álvaro has a background in investment management and venture capital, having been responsible for investment operations at the large multinational telecommunications company Telefónica, executing investments in cybersecurity, cloud, and blockchain technologies. He also founded the digital asset research company decentralize.capital in 2016. In October 2021, Álvaro Gracia joined Borderless, primarily focusing on investing in infrastructure and application layer projects within the DePIN ecosystem.

Development History

Since early 2018, David Garcia and Arul Murugan have jointly invested in multiple blockchain projects. The high-performance public chain Algorand is one of the representative projects, and they are also the largest investors and early supporters of Algorand. Before founding Borderless Capital's predecessor, Algo Capital, they had already invested a total of $8 million in Algorand's Series A funding. The establishment of Algo Capital was also aimed at promoting adoption and creating the necessary network effects within the Algorand ecosystem. It is important to note that Algo Capital is a completely independent entity from Algorand Inc. and the Algorand Foundation, with investment decisions and portfolio management fully handled by David and Arul.

In June 2019, Algo Capital launched the $200 million ALGO Fund I. The following year, to better reflect the brand's values and mission, Algo Capital underwent a rebranding and changed its name to Borderless Capital, while its core mission, vision, and investment strategy remained unchanged. It continued to prioritize support for leading projects based on the Algorand network to promote the development of Algorand's "borderless economy." In June 2021, Borderless announced a collaboration with Algorand and Circle to launch a $25 million Miami Blockchain Fund; by the end of the same year, Borderless announced the initiation of a $500 million ALGO Fund II to help develop projects based on the Algorand blockchain.

In May 2023, Borderless Capital announced it was leading the establishment of a new $50 million fund to support projects focused on cross-chain innovation. This fund is supported by the interoperability platform Wormhole, with other investors including Jump Crypto, Arrington Capital, Solana Foundation, and Aptos Labs. In October of the same year, Borderless Capital, in collaboration with Wormhole, launched the Base Camp accelerator program, a 12-week initiative aimed at supporting Web3 projects looking to leverage the Wormhole cross-chain messaging protocol, which is also backed by the new $50 million fund.

In March 2024, Borderless Capital acquired Miami-based quantitative trading and asset management firm CTF Capital, marking its first acquisition since its establishment in 2018. CTF Capital has a technology and operations team in Latin America and has developed trading models and capabilities utilizing artificial intelligence (AI) and machine learning (ML) strategy engines; automated market making (AMM), a decentralized exchange using algorithmic trading of digital assets; and maximum extractable value (MEV) strategies. Following this acquisition, Borderless's assets under management (AUM) exceeded $500 million, and its team grew to nearly 40 employees, officially beginning its expansion into the Latin American region.

Betting on DePIN

Before launching this $100 million DePIN fund, Borderless Capital, which focuses on the Algorand ecosystem, had already begun to pay attention to and lay out plans in the "DePIN" field.

In July 2021, Borderless launched the $10 million HNT.Fund, with supporters including former Twitter COO Adam Bain and Polygon protocol co-founder Sandeep Nailwal. HNT.Fund is the first non-Algorand fund launched by Borderless, aimed at mining and staking HNT (the native token of the Helium network). In addition to holding HNT tokens and equity in Helium developer Nova Labs for the long term, Borderless has also invested heavily in the broader DePIN ecosystem. Its focus areas include wireless IoT and cellular/5G networks, mobility and spatial location collection, file storage, edge computing, and weather and pollution monitoring.

Borderless believes that the development of the Helium network provides important lessons and insights for the broader DePIN field. Although there was rapid growth in the deployment of Helium devices, the actual utilization of the network remains in a very early stage. Therefore, DePIN protocols need to go beyond incentivizing users to deploy devices and focus more on deploying devices that can maximize adoption rates, usage rates, and practical application utility. It also pointed out that DePIN networks compete based on four key factors: achieving rapid network growth through token-based incentives, crowdsourcing hardware (capital expenditure) costs, embedding financial systems into hardware, and fostering open-source innovation and competition.

It also stated that DePIN networks are key to unlocking global adoption of web3 technologies and economies, as they connect digital currencies and contracts with the "retail" familiarity of tangible real-world utilities and physical assets. While innovative token economies have driven the early development of these networks, their long-term value derives from the actual deployment of hardware infrastructure and practical use and large-scale practical application utility. Over time, this will bring compounded value, providing defensive opportunities to reduce the risk of cryptocurrency investment portfolios.

Portfolio

Since 2018, Borderless has made over 250 investments in the fields of infrastructure, business applications, and emerging crypto protocols. According to PANews statistics, Borderless has disclosed at least 18 investments this year alone, primarily focused on DePIN and infrastructure projects. Especially in the DePIN field, it is often seen taking the lead as an investor. Below is a summary of Borderless's participation in projects this year:

DePIN:

IoTeX: An IoT blockchain platform that announced the completion of a $50 million financing round in April, with participation from Amber Group and others;
Digital Infrastructure: A decentralized physical infrastructure network that announced the completion of a $11.5 million Series A financing round in January, led by CoinFund;
WeatherXM: A crypto-driven weather station network and weather data provider that announced the completion of a $7.7 million Series A financing round in May, led by Lightspeed Faction;
Ambient: A DePIN project in the Solana ecosystem that acquired the Algorand-based environmental data project PlanetWatch in March and announced the completion of a $2 million seed round financing in May, led by Borderless Capital;
Natix: A DePIN project focused on map data that announced the completion of a $4.6 million financing round in April, led by Borderless Capital;
Peaq: A Layer 1 blockchain platform that announced raising $15 million in March to expand its DePIN ecosystem, led by Generative Ventures and Borderless Capital;
Silencio Network: A decentralized data coverage solution provider focused on combating noise pollution that announced the completion of a $1 million Pre-Seed financing round in February, led by Borderless Capital;
Wingbits: A DePIN flight tracking network built on Solana that announced the completion of a $3.5 million seed round financing in September, led by Borderless Capital and Tribe Capital;

Infrastructure and Tools:

Hypernative: A Web3 security company that announced the completion of a $16 million Series A financing round in September, led by Quantstamp;
OpenLedger: A project focused on building permissionless and data-driven infrastructure for AI development that announced the completion of an $8 million seed round financing in July, led by Polychain Capital and Borderless Capital;
Tanssi Network: An application chain infrastructure protocol that announced the completion of a $6 million strategic financing round in March, co-led by Scytale Digital, KR1, and SNZ;
Bagel Network: A decentralized data platform supporting machine learning (ML) models that announced the completion of a $3.1 million pre-seed financing round in January, led by CoinFund;
Mayan: A cross-chain auction protocol that announced raising $3 million in a seed financing round in April, led by Borderless Capital and 6th Man Ventures;
Zircuit: An EVM-compatible zkRollup network that announced the completion of mainnet financing in July, with participation from Binance Labs, Amber Group, and others;
Synonym Finance: A universal cross-chain credit layer that announced the completion of a $1.5 million seed round financing in January, led by Borderless Capital;
Biconomy: A multi-chain infrastructure developer that announced the completion of strategic financing in March, with participation from Jump Capital and others.

DeFi:

Amnis Finance: A liquid staking protocol that announced the completion of a $2 million financing round in September, led by Borderless Capital and OKX Ventures;
Zoth: An RWA platform that announced the completion of a $2.5 million financing round in April, led by Blockchain Founders Fund.

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