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Investing in Chateau: Bringing Composable Private Equities and Funds On-Chain

Hack VC

• 4 min read

We are thrilled to announce our lead investment in Chateau’s pre-seed round! 

Chateau is a protocol that brings TradFi’s private equity and fund investments on-chain, providing DeFi participants with access to these private market opportunities.

What is Chateau?

Chateau is a protocol that connects DeFi participants with institutional-grade real world assets (RWAs), such as private equities. With a team of crypto-native engineers, builders, and seasoned Wall Street veterans spread across Europe, North America, and Asia, Chateau aims to outscale and replace legacy financial systems by creating DeFi products that are significantly better than their traditional counterparts. Chateau minimizes onboarding and regulatory burdens for issuers while maximizing DeFi composability and open access.

Today Chateau allows non-US investors to access a tokenized private credit fund managed by an experienced Wall Street team, along with over 1,000 tokenized pre-IPO private equities, including high-profile companies like OpenAI, SpaceX, Anthropic, ByteDance, and Zipline. 

Our Investment Thesis

“Chateau is the perfect combination of a challenging problem, a well-equipped team, and a grand vision - and we’re very excited to support them!” - Rodney Yesep, Hack VC Partner

At Hack VC, one of our primary theses is the tokenization of RWAs within DeFi. USD stablecoins are the first RWAs to come on-chain, and their breakout performance has validated this thesis. There are over $170B in USD-pegged stablecoins on-chain today, and these businesses can be incredibly profitable.* Just yesterday Tether, the issuer behind the largest stablecoin USDT, announced over $5B in profits in the first half of 2024.*

The next major RWA development has been tokenized Treasury products, which now register almost $2B in AUM in aggregate, led by BlackRock, the world’s largest asset manager.* In addition to offering BTC and ETH ETFs, BlackRock also showed its commitment to DeFi and true tokenization when they announced BUIDL, an ERC-20 token that represents ownership in a BlackRock money market fund deployed on Ethereum, in Q1. BUIDL is now the largest tokenized Treasury product with over $500M in AUM.* 

While stablecoins and tokenized Treasury products have seen the most adoption to date, we believe over the long term all different types of assets (stocks, corporate bonds, real estate, fund interests, etc.) will be tokenized, and private investments are next in line. The tokenization of private investments has the potential to not only democratize access to these assets, but also inject and incentivize liquidity. Interestingly, while non-crypto markets are becoming less liquid, blockchain’s inherent liquidity and composability benefits shine. 

However, challenges remain for both issuers — such as whether the ROI justifies the technological and legal complexities — and investors, who wonder if they can access quality assets that are transferable and usable across chains and applications. That is why we are so excited about Chateau. Chateau’s protocol integrates primitives and compliance directly, reducing the regulatory burden for issuers and requiring no crypto knowledge for them to get started. Additionally, the institutional-grade tokenized assets Chateau offers can also be used as collateral in all sorts of on-chain DeFi protocols (e.g. lending protocols), adding another layer of value for investors. While Chateau is live on Arbitrum today, it plans to deploy on multiple chains over the long-term so that investors can access their desired assets on their blockchain of choice with full composability.

Chateau’s innovative approach and grand vision align perfectly with our mission to drive the adoption of DeFi and RWAs. We are excited to partner with Chateau and support the team on their journey to transform the financial landscape. 

*Endnotes

The information herein is for general information purposes only and does not, and is not intended to, constitute investment advice and should not be used in the evaluation of any investment decision. Such information should not be relied upon for accounting, legal, tax, business, investment, or other relevant advice. You should consult your own advisers, including your own counsel, for accounting, legal, tax, business, investment, or other relevant advice, including with respect to anything discussed herein.

This post reflects the current opinions of the author(s) and is not made on behalf of Hack VC or its affiliates, including any funds managed by Hack VC, and does not necessarily reflect the opinions of Hack VC, its affiliates, including its general partner affiliates, or any other individuals associated with Hack VC. Certain information contained herein has been obtained from published sources and/or prepared by third parties and in certain cases has not been updated through the date hereof. While such sources are believed to be reliable, neither Hack VC, its affiliates, including its general partner affiliates, or any other individuals associated with Hack VC are making representations as to their accuracy or completeness, and they should not be relied on as such or be the basis for an accounting, legal, tax, business, investment, or other decision. The information herein does not purport to be complete and is subject to change and Hack VC does not have any obligation to update such information or make any notification if such information becomes inaccurate.

Past performance is not necessarily indicative of future results. Any forward-looking statements made herein are based on certain assumptions and analyses made by the author in light of his experience and perception of historical trends, current conditions, and expected future developments, as well as other factors he believes are appropriate under the circumstances. Such statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict.

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