Sequoia slashes its crypto fund by 66% after industry collapses: Report

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Enterprise capital large 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.

According to a July 27 Wall Avenue Journal report, the tech-focused VC agency informed buyers in March it could scale back its Sequoia Crypto Fund — together with its ecosystem fund — to raised replicate modified market situations.

The cryptocurrency fund will now focus extra on backing early-stage startups, given the current crypto trade turmoil that took away most 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 buyers 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 offer 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 buyers 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 current occasions was its $214 million funding into the now bankrupt FTX, which the firm later marked down to $0.

Cointelegraph reached out to Sequoia Capital for remark however didn’t obtain an instantaneous response.

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Sequoia’s reported transfer is reflective of a broader development amongst enterprise capital companies which can be selecting to downsize their cryptocurrency bets.

Venture capital investments fell 29.7% in June, with $779.32 million raised throughout 62 separate offers, in keeping with knowledge from the Cointelegraph Research Venture Capital Database.

Enterprise capital inflows have fallen 77.7% from June 2023 in comparison with June 2022.

VC fund inflows into the cryptocurrency market during the last 12 months. Supply: Cointelegraph Analysis

Nonetheless not each VC agency is lowering its cryptocurrency portfolio.

Polychain Capital and Coinfund not too long ago raised $200 million and $152 million for respective funding and seed funds earlier this month.

Journal: The secret of pitching to male VCs: Helping female crypto founders blast off