Sequoia Capital, a famend enterprise agency, has considerably scaled again its cryptocurrency fund in response to a substantial shift within the startup ecosystem.
Based on people aware of the matter, the fund has been lower from $585 million to a leaner $200 million, as reported by the Wall Road Journal (WSJ.)
This substantial discount is a part of an in depth downsizing technique that the agency is implementing because it grapples with challenges within the startup business.
The WSJ famous that Sequoia’s choice to downsize its funds, shared with its buyers earlier this 12 months, was pushed by a change in market dynamics. The enterprise agency goals to adapt its method to raised align with the evolving panorama, planning to pay attention extra on backing early-stage startups.
Based on the Monetary Occasions, Sequoia is retrenching in gentle of a steep inversion in non-public markets, and this transfer can also be designed to offer liquidity to its restricted companions.
Sequoia’s discount shouldn’t be confined to its cryptocurrency fund alone. Based on WSJ, the agency additionally trimmed its ecosystem fund, which invests in different enterprise funds, from $900 million to $450 million.
The downsizing of its crypto funds comes within the wake of previous crypto setbacks. Notably, in Nov. 2022, the agency needed to write off its over $200 million funding in FTX, the cryptocurrency trade, as nugatory.
Regardless of working due diligence when FTX’s income was roughly $1 billion, its collapse diminished its worth. Nevertheless, Sequoia highlighted that its publicity to FTX was lower than 3% of its International Progress Fund III, and the loss was mitigated by features of $7.5 billion from the fund.
Based on the WSJ, Sequoia has maintained that it would nonetheless put money into crypto by way of its different funds.
The submit Sequoia Capital scales again crypto fund by $350M amid business challenges – studies appeared first on CryptoSlate.
