Han Kao: “What we would love is to see more gaming infrastructure deals.”

In this Q&A, Han Kao, founder of Sanctor Capital, shares whether the FTX collapse has changed how the investment company deploys capital. On Nov 2, blockchain investment firm Sanctor Capital announced that it had raised $20 million for its inaugural fund. A couple of weeks later, the collapse of what was once the world’s second-largest cryptocurrency exchange, FTX, sent shockwaves throughout the industry.

Following that, venture capital firms like Sequoia had to write off its entire $150 million investment in FTX while Singapore’s state holdings company, Temasek, had to do the same with its $275 million investment in the now-defunct exchange.

As the crypto industry was reeling from the Terra ecosystem crash in April, investments in blockchain-based games and metaverse projects declined in Q3 ($1.3 billion), compared to $2.5 billion in Q2, according to BGA Games Report by DappRadar for Q3 2022. Despite the doom and gloom of the crypto winter exacerbated by FTX’s shocking collapse, Sanctor Capital’s founder, Han Kao, remains optimistic about the future of Web3 gaming.

Curious about how recent events have affected a newly launched investment company like Sanctor, we speak to its founder, Han Kao, who tells us why the company is still focusing on blockchain gaming and what they take into consideration when deploying capital.

Please tell us about yourself and the story behind Sanctor Capital.

I came into the space from a tech and media background and initially entered the space as an investor. Then in 2017, while I was spending time investing in and doing due diligence in various ICOs, I realized that so many of the projects that were running ICOs at the time had very little substance beneath a dreamy whitepaper. So myself and a few other friends in the space, who I met along the way, began publishing investment reports to help provide more transparency to investors. We wanted to highlight top builders and at the same time call out the cash grabs. Soon our reports became a bit of a signal in the early-stage private markets so we raised some funds to scale out an independent news and research company.

I then spent five years building Crypto Briefing and eventually stepped down from the CEO role at the end of 2020. In 2021 as many new blockchain funds entered the space I saw tons of capital flowing into early-stage investments but very little in the sense of founder support and mentorship. I wanted to build an investment company that was focused on helping missionary founders achieve their goals by lending active investor-side support. We then put together a roster of mentors composed of industry experts and founders and began our journey. So this was the starting point for Sanctor Capital.

What piqued your interest in the Web3 space and where did you first hear about it?

In 2015 I moved from NYC to SE Asia and I was working as Head of Product for an Indonesian user-based reviews and media platform. I was paid in Indonesian Rupiah, the local currency. And due to the instability of the Rupiah, whenever I received my salary I tried to convert it to USD. However, I had a lot of trouble with the local banking system and sending funds back to my US accounts.

Having worked in the US most of my professional career, this was my first real life experience with managing a volatile currency as income and also seeing the frustrations of the banking system. And at some point converting into Bitcoin made more sense than going through the banking system. However Bitcoin transactions were slow and fees were high at the time, so eventually, in 2017 I discovered Ethereum as an alternate option. After reading the whitepaper my imaginations on how big web3 could become just started to run wild.

Why is Sanctor’s first fund focusing on GameFi, DeFi and cross-chain infrastructure specifically?

So to clarify, we’re mostly focused on web3 gaming and gaming infrastructure. The blockchain space has grown so immensely wide since I first started investing in the space. And as an investment company it was important to us to have focus as it is near impossible for a startup firm like ours to cover it all. So when we began thinking about where the biggest opportunities for blockchain might be, we tried to think about all the potential paths to mass adoption.

When looking at the entire space, Infrastructure, DeFi, NFTs, Gaming, for example, we considered which sub-sector could see the highest usage and adoption of blockchain technologies. And the factors […]

source Han Kao: “What we would love is to see more gaming infrastructure deals.”