Sequoia Capital Reduces Crypto Fund by 66%
- Sequoia Capital has reduced its crypto fund by 66%, as per the WSJ.
- The fund’s value was $585 million and has now been reduced to $200 million.
- The VC firm will back early-stage startups that were affected by the 2022 crypto market crash.
- The firm also seeks to lower the capital threshold and entry barrier for its ecosystem fund.
Venture capital firm Sequoia Capital has reduced its crypto fund significantly after the implosion of multiple crypto-related firms in 2022, the collapse of the Terra ecosystem, and the price of the world’s largest cryptocurrency, Bitcoin (BTC), dropping more than 70% from its all-time high. Additionally, the VC firm’s fund, which was valued at $585 million, has now been reduced to $200 million.
As per a report from the Wall Street Journal on July 27, Sequoia told its investors back in March that the venture capital firm would slash its crypto fund significantly to reflect the changed market conditions. The VC funds include the Sequoia Crypto Fund and the ecosystem fund. Twitter, now rebranded as X, is also talking about this decision taken by the VC firm.
Sequoia Capital’s VC fund will now focus on backing startups that are just beginning their operations. The report said that the firm plans to back these startups because their opportunity to shine was taken away by global macroeconomic events and the huge decline in the price of cryptocurrencies in 2022. Moreover, the bearish market conditions also gave many opportunities to the bigger players in the digital asset space.
According to people with knowledge of the matter, another major reason for cutting the fund’s value is to lower the capital threshold and the entry barrier to access the ecosystem fund backed by Sequoia.
We made these changes to sharpen our focus on seed-stage opportunities and to provide liquidity to our limited partners,” said Sequoia in a statement given to the Financial Times. Moreover, the firm also confirmed that it had returned close to $15 billion to its investors over the past three years.
Interestingly, the VC fund from Sequoia was launched in February 2022, when the total worth of the crypto market was down 39.1% from its all-time high of $3 trillion in November 2021.
As reported earlier by BitcoinWisdom, the VC firm has decided to split its global operations into three different regions, separating its Sequoia China venture from the well-known Europe and US partnership. The US division will focus on projects based in North America. Another branch of the firm will cater to projects in China, while the final division will concentrate on India and other Asian markets.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
