Interview with Kenrick Drijkoningen, Founding Partner at LuneX Ventures

By Gabriel Tan, Analyst.
January 11, 2021–5 min read.

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Kenrick is the founding partner of LuneX Ventures, one of the first crypto-focused venture funds built out of a traditional venture capital firm — Golden Gate Ventures. Kenrick has a deep history working within the internet space through previous roles with Rocket Internet and Nonstop Games (acquired by King, developer of mobile games including Candy Crush).

Based out of Singapore, LuneX Ventures is more than just a pure crypto-fund, within their mandate is the ability to invest in both tokens (primary and secondary market) and equity into blockchain-focused companies. Golden Gate Ventures is a Southeast Asian venture capital firm with over 30 regional investments, including Omise, the parent company of the OMG token.

In this post we share a conversation with Kenrick about the way he views the crypto-markets from both a crypto-native perspective and an institutional perspective within traditional finance.

Gabriel Tan
Kenrick, can you tell us about your unconventional background and how it eventually led you to be running the first crypto-fund under Golden Gate Ventures?

Kenrick Drijkoningen
I’ve always been broadly interested in early stage tech, startups, finance and economics. As such I was pretty early with the internet, building websites in the 90’s in the dial-up days and witnessing the dot-com-boom and bust losing half my tiny savings. I kept experimenting with online businesses and in the meantime spent the past 15 years in Asia, from Thailand to Hong Kong, Mongolia, Malaysia and eventually Singapore. Here I put my self-taught internet marketing skills to use with various startups and eventually joined the VC side at Golden Gate Ventures.

Gabriel Tan
I’ve found it interesting to see that LuneX is one of the few traditional VC-backed crypto-funds in the region. Why have we not seen more traditional fintech funds entering the space despite supposedly being at the forefront of ‘emerging tech’?

Kenrick Drijkoningen
This also still puzzles me but I think this comes down to human nature and organizations simply not capable of adapting to radical change. Crypto is an intellectual challenge and a leap of faith, it is often easier for existing VC’s to ignore it, much like how organizations ignored the internet in the 90’s or were not capable of adapting. They have little incentive at these early stages, it would require recognition across the organization and a lot of work to educate existing LP’s for deals that to date have been relatively small.

Crypto is an intellectual challenge and a leap of faith, it is often easier for existing VC’s to ignore it, much like how organizations ignored the internet in the 90’s or were not capable of adapting.

Fintech focused VC’s who still do not look at crypto will go the way of the dinosaurs and are simply negligent at this point.

Gabriel Tan
How are your conversations with institutional investors changing as the crypto-markets develop? I’d imagine that conversations about DeFi and other non-Bitcoin assets are still largely out of the picture for now.

Kenrick Drijkoningen
Conversations are slowly changing, a few years ago no institution would take crypto seriously and it was mostly HNWI and family offices dipping their toes. Last year we did onboard MavCap, a large institution out of Malaysia, as an LP. We’ve had a great relationship with them for a number of years and they started to recognize the opportunity which is great. Late 2020 has been a tipping point with major US hedge funds publicly announcing Bitcoin positions and even DBS announcing an exchange. The market has flipped from career risk being into career risk not being in.

Gabriel Tan
I took note that you invest in both equity and tokens as compared to many token-only funds within the space. In our experience it’s generally more common to engage in token-only investments. What were your main motivations for participating in equity deals?

Kenrick Drijkoningen
From the start I knew we had to remain flexible in a crazy and fast industry and it was not clear at all whether things would tilt more to token raises or to equity. A few years later we see there’s a place for both but mechanisms are still evolving, most companies should never have a token but in the case of DeFi protocols it might make sense. By having a relatively open mandate we could take advantage of opportunities on both sides.

Gabriel Tan
Can you talk to us about some of your ‘best’ or favourite investments? What are some names that LuneX has recently invested in?

Kenrick Drijkoningen
Most of our portfolio companies are doing really well but it’s a bit early to say who will be the home runs. Our thesis has always been that traditional finance will have to come in and acquire if they want to stay relevant, I believe this will happen this cycle and they’ll have to pay top dollar. Our token portion has also done extremely well where we’ve focused on projects with clear product market fit and of course always making sure to keep Bitcoin upside exposure. Overall I think we are currently and will be one of the best performing VC funds in the region.

Gabriel Tan
With your base being in Singapore, do you think that the Singaporean government will continue to let the country be a haven for crypto-firms and let the industry thrive? Do you think there will be any opportunity in the short-term for funds to be domiciled locally rather than offshore and what are the risks that you see there?

Kenrick Drijkoningen
I wouldn’t call Singapore a haven for crypto, recent regulations under the Payment Services Act are actually quite stringent and are pushing quite a bit of costs onto startups. In general I think Singapore has done a great job walking that fine balance but there’s a risk of it becoming a bit too restrictive. For example a recent amendment to the PSA alludes to non-custodial software providers and how they might be regulated, this could have a broad impact depending on the exact interpretation and enforcement of such regulations. But overall I do think Singapore is in a great spot and smart about how they approach the industry, they recognize the benefits and potential.

Gabriel Tan
With regard to your upcoming fund, how can interested investors get in touch with you and start a conversation?

Kenrick Drijkoningen
Feel free to reach out at kenrick@lunex.vc and we’d love to have a chat!

Hillrise Capital is an independent research and advisory firm exclusively focused on blockchain startups and crypto-assets.

LuneX Ventures is the crypto- and blockchain-focused arm of Golden Gate Ventures based out of Singapore.

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We’re an independent research and advisory firm focused on blockchain startups and crypto-assets.

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