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Crypto VC firm Blockchain Capital closed $580M for two new funds

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Sep 19, 2023
Illustration of a crypto block with an image of a one hundred dollar bill on one side.

Illustration: Gabriella Turrisi/Axios

Crypto-focused VC firm Blockchain Capital has closed two new funds for a total of $580 million.

Why it matters: Despite a global slowdown in crypto dealmaking, LPs continue to back firms focused on the sector.

Details: The two new vehicles, first reported by TechCrunch, are Blockchain Capital's sixth early-stage fund and its first opportunity fund.

  • Roughly two-thirds of the $580 million will be allocated to backing early-stage startups, and one-third will go toward late-stage vehicles.

Context: Due to the collapse of firms like FTX — and increased regulatory scrutiny in the sector — VC funding for crypto startups has fallen dramatically in recent quarters.

  • According to data from Architect Partners, crypto investment in the second quarter was down 71% from the same period in 2022.
  • That was also its lowest level since the fourth quarter of 2020.

State of play: Despite that, VC firms in the sector continue to raise new funds.

  • Last week, an SEC filing disclosed that Electric Capital is raising $300 million for its third investment vehicle.
  • In July, Polychain Capital raised $200 million in the first close of its fourth fund, and CoinFund raised $158 million for its fourth fund.
  • Race Capital, an early-stage fintech investor that backs crypto startups, raised $150 million for its second fund in late June.
  • Earlier in the year, former Binance former head of M&A Bill Qian told Lucinda he was raising $100 million to invest in crypto startups.

What we're watching: Just how long it might take for crypto investment to rebound, considering the amount of dry powder available across these new funds.

Of note: Blockchain Capital last raised $300 million for its fifth fund in mid-2021, just before the onset of this latest crypto winter.

  • Its portfolio includes investments in companies like Coinbase, Circle, Ripple, Anchorage Digital, OpenSea and Aave.
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