For blockchain investor and unicorn builder Miko Matsumura, it’s always about investing in a team rather than a project. Matsumura is managing partner of Gumi Cryptos Capital (gCC), a San Francisco-based early-stage blockchain investment fund worth $500 million.
One of the latest projects gCC has invested in is the strategic partnership between Greek-founded infrastructure company web3 Mysten Laboratories and Ethos, the creators of the Ethos Wallet product, which allows users to discover and experience next-generation decentralized applications (“dApps”) on Sui Layer 1, a blockchain that redefines asset ownership.
In an interview with The Recursive, Matsumura shares his thoughts on gCC’s latest investments, their philosophy, how the fund chooses where to invest, the future of the blockchain and crypto space, and more.
The Recursive: The Mysten Labs and Ethos partnership on Sui – what will this bring to the industry?
Miko Matsumura: We’re very excited about the Sui ecosystem – what’s exciting about the Ethos wallet is that their approach to the wallet is based on much deeper integration with the ecosystem. The idea therefore perhaps becomes closer to an application store model than to a simple wallet. In a sense, the interactions, the games, the applications really become integral, both discovered through the wallet, but also sort of integrated into the wallet.
So your interactions with the Sui ecosystem are really very native – so you’re just kind of flowing through, you’re browsing through this sort of collection of apps and I think one of the things we’ve noticed about the launch of the Sui platform. is that they really focused on providing very high quality gaming experiences.
We think an app store model and the play store concept is a very popular idea – whether it’s something like streaming or these kinds of browsing experiences that make a lot of sense.
When you look in places like Google Play Store on mobile, or if you look in places like Apple App Store for iOS, you definitely end up seeing a lot of entertainment-related things. And I feel like that’s going to be a pretty important part of the Mysten Labs ecosystem.
We’re really excited about this – that’s why gCC invested in this project, which is tied to the thesis of the field, around what we think is going to happen, but obviously we also think this team is very classy global and super amazing too.
What is gCC’s blockchain and crypto investment philosophy and strategies?
We are fundamentally a very heavily builder-focused fund. We only really invest in the early stages of web3 projects and startups and in this particular case we are definitely leading more than we are following.
Because we consider ourselves a builder – all three partners have founded, grown, built and exited companies, including M&A, IPOs or different types of outcomes. And that’s why we, as a fund, are very dedicated to finding these builders.
One of the things we like to call them is “Gumicorns”, which looks a bit like a unicorn, but in a way it’s more like a specific type of individual. So, you know, we’ve definitely seen it with Nadia (editor’s note: Nadia Eldeib), who is the CEO and founder of Ethos Wallet, and we really think that’s a pretty incredible achievement.
How do you identify potential investment opportunities in early-stage companies?
One of the most important critical factors is the type of team. So we’re definitely team oriented. The other thing that we’re really looking for is that we kind of focus on builders and construction. And we see winter crypto markets as being best for builders, so we’re really focusing on this very, very simplistic rubric of looking for people who are essentially building software that other people want to use.
So in essence, we’re really looking at themes like mass adoption, that brings us to themes like financial services, gaming – so we’re just looking for those people. We are really pleased to have very sophisticated and professional product specialists, coupled with sophisticated engineers to deliver our products. So our main goal is to quickly deliver very powerful and very usable software.
And in a sense, part of our criteria is really looking for that, and we like to see that combination. So if you look at the type of founding team like at Ethos Wallet – sort of a builder engineer paired with a product manager, that’s the combination that’s really powerful for us.
The construction software part is actually the engineering part, and the product part is what people want to use. So, in a sense, these two characters are a really key element. For example, if you go back to the founding of Apple, you could really see the classics Steve Jobs and Steve Wozniak.
Essentially, you have a product type person, a visionary type person, and then you have an engineer type person. So those are the things that I think we kind of find the most compelling and the most appealing. Because when we think about these two things like making the software and the people wanting to use it, those are two sides of this issue.
What types of sectors or projects do you think are the most interesting in the industry right now?
I would say that across verticals we tend to focus on financial services, including DeFi. We also tend to focus on things like gaming and gaming-related projects. I think one of the coolest things about wallet infrastructure is that it’s definitely horizontal.
We think the basic functionality of the wallet is quite commoditized. But we think the approach that Ethos is taking, where you see more of an app store with app discovery, is becoming a little more differentiated.
Especially with a new ecosystem like Mysten Labs, you tend to see it as a very good opportunity for new players to appear and offer new infrastructure.
How has investor behavior in blockchain and crypto changed over the past few years?
I think one of the biggest shifts in the infrastructure investment paradigm is that we’re really moving toward modular infrastructure. So we’re excited about this type of modularity, which becomes more of a venture capital investment. I think the average time to become a unicorn in Web 2, according to the book “Super Founders”, is about four years, median time, and then it starts to decrease around seven years.
Essentially, if your project takes around four to seven years to develop, then you might be a suitable target for raising venture capital. On the other hand, if your project takes 10, 20, or 30 years to complete, or if it is just starting to show results, it is probably a poor candidate for venture capital, because the funds do not work not on this time scale.
One of the things we’ve seen in terms of changes in the industry is that this idea of modularity creates an opportunity for new funds to be sent to new places. And it takes something monolithic, like a layer 1 that splits into L1, L2, or splits it into smaller pieces that can all be funded independently.
Which I think gives these pieces better granularity to be more compatible with venture investing – whereas I feel like the traditional model really borrows a lot from open source.
In light of current market conditions, what advice would you give to investors looking to enter the blockchain space?
It’s very, very important to have sufficient diversification because I feel like there’s a lot of risk in this market. So my advice to anyone entering this market should be to try and stay diversified.