Variant raises new $222 million fund focused on ‘autonomy’

Venture capitalist Jesse Walden made his name as a crypto investor—a job he says will disappear before the decade is out. “In four years, being a crypto investor will be like being an ‘Internet investor’,” says Walden, who started his investing career at Andreessen Horowitz before founding his own crypto-focused firm, Variant, in 2020.

This looming disappearance of crypto as a stand-alone investment category has not, however, prevented Walden from raising $222 million for Variant 4, a new fund dedicated to investing in companies at the earliest possible stage and supporting them as they grow. In an interview with Fortune, Walden explained he stands by the crypto themes that defined Variant’s first three funds, but that he has widened the firm’s thesis to account for recent developments in the industry, and the fast-changing world of AI.

That original thesis revolved around how blockchain technology can permit people to own and control more of the online world without relying on centralized platforms like Google and Facebook—a concept that led to widespread predictions in corners of the VC industry that crypto was ushering in a new “Web 3” era of the internet. That term, however, and the ideals it promised never really materialized as consumers struggled with clunky crypto interfaces, and the tech giants remained as dominant as ever.

According to Walden, the Web 3 world may not have come to pass as its proponents envisioned, but its underlying principles of decentralization did give rise to notable successes, particularly in the realm of finance. He points to the popular DeFi platforms Uniswap and Morpho, both of which figure in Variant’s investment portfolio. Walden adds that these developments have also validated the intellectual premise of decentralization, and what he describes as Variant’s refined thesis of “autonomy.”

“We’re defining autonomy as this much broader tent of any application that enables more agency for users, and of course that includes permissionless finance and crypto,” said Walden. “But it also includes agentic applications that do the same for users so I would say we’re expanding our aperture, and I see it as like a very authentic evolution for us, because we’ve always been interested in ways to get the user more agency.”

Walden adds that the experiences of crypto entrepreneurs, and the history of Bitcoin, offer valuable lessons for empowering autonomy in the age of AI. Specifically, he points to how the crypto world was forced to design systems with rigorous legal and security foundations that can withstand both hostile governments and relentless hackers. In coming years, he says, companies will be eager to hire those with crypto expertise to help them navigate the blockchain rails on which a growing number of financial transactions are flowing.

Walden is also optimistic that the ideas that drove the Web 3 movement will find new traction in the AI era. He points out that AI agents are rapidly becoming an integral part of how companies communicate with their customers, partners and suppliers. In this environment, Walden says, it won’t be viable for firms like Facebook to wield control over rivals as they have done in the past by shutting off access to data since that could result in agents simply turning to more accessible alternatives.

As for the future of crypto, Walden says the past five years have shown the technology often failed to live up to the hype due to a fundamental misconception of what it is meant to do.

“Crypto is plumbing. We’ve run a lot of experiments where crypto really wanted to be seen as the product. Where we ended up is crypto is this rail that enables lots of products, and that growth story is just getting started,” said Walden.

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