Enterprise capital big Sequoia Capital reportedly downsized its cryptocurrency fund from $585 million to $200 million, amid a liquidity crunch and a pivot away towards smaller crypto gamers.
In accordance to a July 27 Wall Avenue Journal report, the tech-focused VC agency advised traders in March it might cut back its Sequoia Crypto Fund — together with its ecosystem fund — to higher replicate modified market circumstances.
Sequoia Capital curbed crypto investments by a hefty 65% , choosing a nurturing stance on startups. Not a risky market apathy, however strategic cognition, of us! #CryptoInvestments $BTChttps://t.co/hfsAAd8jeV pic.twitter.com/8JvtyShg0n
— Chain Overview (@Chain_Review) July 27, 2023
The cryptocurrency fund will now focus extra on backing early-stage startups, given the latest crypto business turmoil that took away lots of the alternatives to again bigger corporations.
One other motive behind the cuts is to decrease the capital threshold and thus the barrier to entry for traders to partake in Sequoia’s fund choices, in keeping with the sources.
“We made these adjustments to sharpen our give attention to seed-stage alternatives and to supply liquidity to our restricted companions,” reportedly mentioned Sequoia in remarks to the Monetary Instances. The agency added it had returned greater than $15 billion to traders over the previous three years.
The agency’s cryptocurrency fund launched in February 2022, when the market cap of the cryptocurrency market was 39.1% down from its all-time excessive of $3 trillion in November 2021.
One of many agency’s hardest blows in latest instances was its $214 million funding into the now bankrupt FTX, which the agency later marked all the way down to $0.
Sequoia Capital’s $214M #FTX stake marked all the way down to $0 ⚰️ pic.twitter.com/RHQJaRq1dL
— CryptoSavingExpert ® (@CryptoSavingExp) November 10, 2022
Cointelegraph reached out to Sequoia Capital for remark however didn’t obtain a direct response.
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Sequoia’s reported transfer is reflective of a broader development amongst enterprise capital companies which might be selecting to downsize their cryptocurrency bets.
Enterprise capital investments fell 29.7% in June, with $779.32 million raised throughout 62 separate offers, in keeping with knowledge from the Cointelegraph Analysis Enterprise Capital Database.
Enterprise capital inflows have fallen 77.7% from June 2023 in comparison with June 2022.
Nonetheless not each VC agency is decreasing its cryptocurrency portfolio.
Polychain Capital and Coinfund lately raised $200 million and $152 million for respective funding and seed funds earlier this month.
Journal: The key of pitching to male VCs: Serving to feminine crypto founders blast off
