Katie Haun: Crypto Has 'Many More Use Cases Than We Imagined'

In March 2022, Katie Haun raised $1.5 billion to launch her venture capital firm, breaking records for the largest debut fund raised by a solo female founding partner. The timing might have seemed inauspicious for the crypto-focused fund: Just months later, the collapse of Terra and FTX would send crypto markets into a tailspin. But Haun's measured approach has positioned her firm for what she sees as crypto's next chapter.

"We think of crypto as meaning something different than just cryptocurrency," Haun says. "What we mean when we say crypto is cryptographic proofs paired with economic incentives. Thought of that way, the space is much broader."

When she entered the investing field in 2018, most people thought the only real area where crypto made sense was in financial applications, Haun explained in a recent Fortune interview. "What I've learned is that, wow, there are so many more use cases than we imagined back then,” she said.

An ‘Internet Native Asset Class’

The broader vision for crypto encompasses everything from distributed computing technologies to new computing platforms. Haun, a former federal prosecutor, has built her investment thesis around viewing crypto as an "internet native asset class,” one that extends far beyond the popular conception of digital currencies as mere vehicles for speculation.

“There are financial services, financial infrastructure, things like bitcoin, things like ethereum, things like solana,” she says. “But there are also later-stage companies built to service protocols like that, picks and shovels companies, if you will, custodians.”

Haun Ventures operates two funds: a $500 million early-stage vehicle, and a $1 billion acceleration fund targeting more established projects. 

From Prosecutor to VC

The journey from government prosecutor to crypto venture capitalist wasn't part of some grand master plan, Haun readily admits. She describes it as a "butterfly moment of life,” a fork in the road where she chose to step away from a promising trajectory at the Department of Justice.

But she has found her legal background proves surprisingly relevant to her current role. During her decade as a federal prosecutor, Haun developed a knack for connecting disparate pieces of information. 

"It's about collecting dots and connecting dots," she says, drawing a parallel between investigating cases and evaluating investment opportunities.

The firm recently added Diogo Mónica as general partner, bringing aboard someone Haun had known since before he co-founded Anchorage Digital. Mónica's technical background in distributed systems and security, dating back to his Ph.D. work 20 years ago, complements Haun's legal and regulatory expertise.

Their partnership highlights a distinctive aspect of Haun Ventures: its ability to straddle both the crypto-native and traditional venture worlds.

“Some founders don't want crypto investors, and they look at us as crypto-knowledgeable non-crypto investors," said Mónica in a recent CNBC Fireside chat.

Haun sees other areas, like stablecoins, as increasingly significant. She points out that stablecoin issuers now rank as the 18th largest holder of U.S. Treasurys, poised to surpass Germany, remarkable for an innovation that emerged less than a decade ago.

An ‘Internet-Sized Opportunity’

As far as what the future may hold, Haun sees privacy as a critical frontier for crypto innovation as well. She points to the dramatic increase in electronic payments, from roughly two per month for the average household in 1979 to multiple daily transactions today, and the corresponding explosion in collectible data.

"The amount of geolocation data that I could collect on a person with this system is truly extraordinary," she warns. "In an age of artificial intelligence, we should all be concerned about that." 

"We've been in crypto through the space dedicated to the space through numerous periods of volatility," she notes. 

Haun points to crypto's emergence as a key topic in recent presidential and congressional races as evidence of the technology's growing importance. She notes the shift in tone from previously skeptical lawmakers, citing House Financial Services Committee Chairwoman Maxine Waters' recent acknowledgment that "crypto is inevitable."

"We're very bipartisan. We'll work with anyone who is elected, and we think that's a necessity, of course. That's table stakes to be able to work with both sides of the aisle," Haun emphasizes.

Haun has maintained crypto is an "internet-sized opportunity” with the potential to build infrastructure for a more open, efficient, and privacy-preserving digital economy.

“Crypto is a broad category. You're talking about assets that face consumers, but you're also talking about infrastructure with this new deep tech,” she says. “If you think about some of the layer two scalability solutions, if you think about infrastructure like validators, these kinds of things are really infrastructure plays. 

“Then you could also think about protocols themselves. If you were inventing the internet, you might think of protocols like SMTP or HTTP. That's the equivalent we think of layer one protocols today in crypto. But the difference was you couldn't invest in SMTP or HTTP. Here we can actually invest in the protocols themselves."