VC firm Sequoia Capital has reportedly downsized its crypto fund from $585 million to $200 million amid a liquidity crunch and focus on smaller crypto players.
VC firm Sequoia Capital has reportedly downsized its crypto fund from $585 million to $200 million amid a liquidity crunch and focus on smaller crypto players.
One of the primary motivations behind the fund reduction is to lower the capital threshold, making it easier for investors to participate in Sequoia’s fund offerings.
“We made these changes to sharpen our focus on seed-stage opportunities and to provide liquidity to our limited partners,” stated Sequoia in a released statement. Over the past three years, the company has returned more than $15 billion to its investors, highlighting its commitment to delivering results.
The venture capital firm introduced its cryptocurrency fund in February 2022, when the market capitalization of cryptocurrencies was 39.1% lower than its peak at $3 trillion in November 2021.
Crypto VC investment experiences 70% drop in one year
Sequoia’s reported decision mirrors a wider trend in the venture capital industry, where firms are cutting back on their cryptocurrency investments.
In June 2022, the digital asset sector attracted an impressive $1.81 billion in funding through 149 funding rounds. However, in June of the current year, only 88 projects managed to secure a total of $507 million, making it the least funded month to date.