Despite the ongoing crypto bear market, Blockchain Capital has successfully closed two new venture funds amounting to $580 million, marking a significant milestone in the venture capital landscape for blockchain and cryptocurrency.
Blockchain Capital’s general partner, Spencer Bogart, revealed that the two funds would be allocated in a two-thirds to one-third ratio. The larger portion is designated for the firm’s sixth early-stage fund, while the remaining amount will be channeled into its first-ever “opportunity fund.” The early-stage fund aims to invest in six key sectors: decentralized finance (DeFi), centralized finance, centralized infrastructure, decentralized infrastructure, gaming, and consumer/social technologies. The opportunity fund, on the other hand, will target projects that the firm might have overlooked during their seed or Series A funding rounds.
Speaking to TechCrunch, Bogart emphasized that the firm had no plans to deviate from its core focus. “We have no intent to expand and become an AI fund or hedge fund and trade tokens,” he stated. He also noted that a $2 billion fund would be too large for the current investment climate, citing difficulties in finding high-conviction investment opportunities at that scale.
Strategic partnerships and long-term vision
The firm’s limited partners (LPs) are categorized into two groups: strategic LPs, such as Visa and PayPal, and long-term committed capital from university endowments, family offices, and sovereign wealth funds. Strategic partners are particularly valuable as they serve as the firm’s “eyes and ears on the ground,” helping to identify potential collaborations.
Blockchain Capital has also shifted its investment strategy to lead “most” of the funding rounds it participates in. This change allows the firm to commit over 50% of the funding in these rounds, thereby gaining a board seat and having a say in financing and governance.
The firm plans to deploy the capital over a period of two to five years, depending on the opportunities that arise. This flexible timeline aligns with the firm’s long-term vision of investing in blockchain-based startups that aim to democratize and distribute the future of digital and financial lives.
In summary, Blockchain Capital’s latest funding round not only signifies the firm’s confidence in the blockchain and cryptocurrency sectors but also underscores its commitment to long-term, strategic investments. With a focus on multiple sectors and a flexible investment timeline, the firm is well-positioned to navigate the complexities of the crypto industry.
