One of the oldest and most influential venture capital firms – Sequoia – has become even more active in the cryptocurrency space. In the latest development, it announced a new sub-fund of $500-$600M that will focus primarily on liquid tokens and digital assets.
Industry’s Best-In-Class Goes for Crypto Fund
The newly unveiled Sequoia Crypto Fund will help the California-based firm to participate more actively in protocols, better support token-only projects, and understand the ecosystem. This is one of the three sub-funds at the firm under the primary Sequoia Capital Fund.
According to the official announcement, the fund will remain committed to working collaboratively with the crypto community, including offering ongoing support for open-source research.
The fund in question will back layer 1 protocols, layer 2 add-on systems, decentralized finance (DeFi), centralized applications, the data layer, payments, gaming, Web 3, NFT, and consumer and enterprise infrastructure. Sequoia also plans to continue to join forces and invest in crypto teams out of its seed, venture, growth, and expansion funds.
Shaun Maguire, a partner at Sequoia, was quoted by Financial Times saying,
“The area in crypto where we have the most opportunity for improvement is really in the liquid stuff. Our founders have asked us for a lot of help there, and we just haven’t been able to deliver in the traditional venture capital model.”
In addition to the new crypto investment vehicle, Sequoia created Ecosystem Fund ($900 million–$950 million) and Expansion Fund ($3.2 billion–$3.5 billion). Interestingly, both products will support a myriad of technologies, including cryptocurrency. Proceeds from these sub-funds will be directed to Sequoia Capital Fund.
Sequoia Levelling up Infrastructure
Sequoia believes crypto may “megatrend” over the next two to three decades. Maguire noted that the industry is the future of money and went on to add that the company has a long-term view of the industry. He also revealed that nearly 20% of the firm’s investments in the past 12 months have been for crypto startups.
Over the past few years, the company has forged partnerships with many prominent faces of the industry. These include Sam Bankman-Fried at FTX, Jack Dorsey at Block, Uri Kolodny and Eli Ben-Sasson at StarkWare, and Michael Shaulov at Fireblocks, to name a few. With the fund in the picture, such deals are expected to increase.
Recently, Sequoia Capital announced leading a financing round for the Ethereum layer 2 scaling solution Polygon. With the funding round, the venture capital firm became the latest Silicon Valley company to invest in the Web 3 ecosystem.
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