Sequoia Capital Announces $500M-$600M Crypto Fund

Table of Contents

• Restructured Sequoia Launches Crypto Sub-Fund
• Sequoia Wants To Start Staking And Trading
• Investment Behemoths Turning To Crypto

Venture capital firm Sequoia Capital has announced that it is looking to raise around $500-600 million crypto fund to invest exclusively in the crypto space.

Restructured Sequoia Launches Crypto Sub-Fund

Sequoia Capital is the latest financial giant to bet heavily on cryptocurrency. The sector-specific fund will be one of the first sub-funds launched by the firm since its significant restructuring. The firm has shifted its focus away from a traditional venture capital structure. Instead, the Sequoia Fund has been established. It is an open-ended liquid portfolio of public positions in specific companies that allocate capital to a series of close-end sub-funds. According to reports, there is a $900-950 million Ecosystem sub-fund that allows portfolio founders to invest in related companies and a $3.2-3.5 billion Expansion sub-fund investing in growth-stage companies. 

Because of the restructuring, the Sequoia Crypto Fund will primarily invest in tokens already listed on crypto exchanges and those that are yet to be listed. In other words, the fund is looking only at liquid tokens. The fund also holds all of Sequoia Capital’s US and European investments, including publicly traded stakes. In addition, Sequoia will continue investing from its main seed, venture, growth, and expansion funds into crypto. 

Sequoia Wants To Start Staking And Trading

The venture capital firm has been bullishly investing in the crypto space since 2015, dabbling both in equity and token deals. In fact, in 2021, around 20% of the firm’s new investments in the US and Europe were in crypto. Major players in the space like FTX, Fireblocks, StarkWare, and Filecoin feature prominently in its investment portfolio. Addressing questions about the crypto sub-fund, Shaun Maguire, partner at Sequoia Capital, has claimed that the firm is looking to start staking and trading tokens, providing liquidity, and participating in governance, instead of just buying and holding them. 

He said, 

"This new fund gives us the flexibility to engage even more deeply…Our network of builders at Ethereum, Solana, major DeFi protocols, and beyond have urged us to do the same.”.

Investment Behemoths Turning To Crypto

Sequoia is just one of the many global investment giants that are exploring the crypto space by committing to sizeable investments. In November, investment firm Paradigm announced a $2.5 billion fund dedicated explicitly to crypto startups, with a focus on token-based apps. It was the most funds raised in the space to date. Another Silicon Valley giant Andreessen Horowitz came close with a $2 billion crypto fund. In January, Citadel Securities had announced a $1.5 billion investment from Paradigm Capital and Sequoia Capital, indicating an impending foray by Citadel into the crypto space. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.