WebN Group Shuts Down as Brevan Howard Rethinks Crypto Strategy

In a move that has sent ripples through the blockchain and Web3 ecosystem, WebN Group, the highly touted incubator backed by billionaire hedge fund manager Alan Howard, has quietly shuttered its operations after several years of seeding promising digital infrastructure startups.

According to sources familiar with the matter, the venture studio—which had positioned itself as a bridge between traditional finance and the emerging decentralized web—has successfully “completed its mission,” though the timing and circumstances of the closure have raised questions about the broader crypto investment landscape.

A Promising Beginning

WebN Group launched with considerable fanfare, promising to identify and nurture the next generation of blockchain innovators. The incubator attracted significant attention when Japanese banking giant Nomura’s crypto arm, Laser Digital, made an undisclosed investment in 2023, signaling institutional confidence in the venture’s vision.

The studio’s portfolio boasted several notable names in the crypto space. Libre (now rebranded as KAIO) emerged as a tokenization specialist, aiming to bring traditional assets onto blockchain rails. Twinstake positioned itself as a crypto staking provider, capitalizing on the growing demand for yield-generating blockchain services. TruFin focused on building blockchain infrastructure, while Geometry tackled the complex world of zero-knowledge proofs—a cryptographic method crucial for privacy and scalability in Web3 applications.

The Broader Context

The closure of WebN Group comes against a backdrop of significant turbulence in the crypto investment world. Brevan Howard, the $36 billion hedge fund founded by Howard, has faced its own challenges in the digital asset space. The firm’s dedicated crypto fund suffered a staggering 30% loss last year, according to reports in the Financial Times, marking its worst performance since inception.

This decline follows a period of strong returns, with gains of 52% in 2024 and 43% the year before, highlighting the extreme volatility that characterizes crypto markets. The fund’s struggles mirror those of many institutional investors who rushed into digital assets during the 2021 bull market, only to face significant headwinds as the market corrected.

Strategic Shifts at Brevan Howard

The decision to wind down WebN Group appears to be part of a broader recalibration of Brevan Howard’s crypto strategy. The firm has been trimming its exposure to bitcoin-related investments, including cutting holdings in BlackRock’s iShares Bitcoin Trust by approximately 85%, according to data from Bloomberg and CF Benchmarks.

These moves suggest a more cautious approach to direct crypto exposure, even as the firm maintains its long-term conviction in blockchain technology’s potential. “Those who know Alan, know that he has long been convinced that blockchain technology would be used in traditional markets,” said a source close to the situation.

Leadership Changes and Spinoffs

The past year has also seen significant personnel changes at Brevan Howard’s digital asset division. Gautam Sharma, CEO of BH Digital, departed after several years overseeing the firm’s crypto investing efforts. Additionally, the firm spun out Nova, a hedge fund led by former Dragonfly investor Kevin Hu, who had joined Brevan Howard in 2023 as part of an acquisition.

These moves suggest a strategic reassessment of how Brevan Howard approaches the digital asset space, potentially separating different investment strategies and risk profiles into distinct entities.

The Fate of WebN’s Portfolio Companies

While WebN Group itself is closing, the startups it helped launch continue to operate independently. Sources indicate that some WebN staff have transitioned to roles within Brevan Howard, suggesting a degree of continuity in the firm’s crypto-related activities.

The portfolio companies—Libre/KAIO, Twinstake, TruFin, and Geometry—now face the challenge of scaling their operations without the direct support of their founding incubator. Each operates in a different segment of the blockchain ecosystem, from tokenization and staking to infrastructure and cryptography, potentially giving them diverse paths to sustainability.

Market Implications

The closure of WebN Group raises questions about the sustainability of crypto-focused venture studios and incubators. These entities proliferated during the 2021 crypto boom, promising to provide the capital, expertise, and connections needed to navigate the complex blockchain landscape.

However, the current market environment—characterized by regulatory uncertainty, technological challenges, and shifting investor sentiment—may be proving inhospitable to such specialized incubators. The decision by a high-profile player like WebN to exit suggests that even well-funded, well-connected crypto ventures may struggle to find their footing in the current climate.

Looking Ahead

Despite the closure of WebN Group and the recent performance challenges, sources maintain that Brevan Howard remains committed to digital assets in the long term. “Brevan Howard isn’t scared off by temporary volatility, remains bullish on digital assets and has a huge VC business focused on the broad opportunity set,” said one insider.

This suggests that while the firm may be adjusting its approach and reducing certain exposures, it continues to see value in the underlying blockchain technology and the broader crypto ecosystem. The challenge for Brevan Howard and other institutional investors will be navigating the balance between conviction in the technology’s long-term potential and the short-term market realities.

The Broader Crypto Investment Landscape

WebN Group’s closure is just one data point in a complex picture of institutional crypto investment. While some firms are pulling back or recalibrating, others continue to enter the space or double down on their commitments.

The contrasting strategies reflect the ongoing debate within the investment community about crypto’s role in institutional portfolios. Some view recent market turbulence and regulatory challenges as signs that the technology needs more time to mature, while others see them as temporary setbacks in an inevitable march toward mainstream adoption.

Conclusion

The shutdown of WebN Group marks the end of an ambitious experiment in bridging traditional finance and the emerging Web3 ecosystem. While the incubator’s portfolio companies continue to operate, their journey forward without the direct support of their founding studio will be a crucial test of their viability and the strength of the business models they represent.

For Alan Howard and Brevan Howard, the closure represents a strategic pivot rather than a retreat, suggesting that while the approach may be evolving, the underlying conviction in blockchain’s transformative potential remains intact. As the crypto industry continues to mature, the coming months and years will reveal whether this recalibration positions the firm for success or if it signals a more fundamental reassessment of crypto’s role in institutional portfolios.

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