Cryptocurrency-focused investment firm Blockchain Capital has successfully secured $580 million for a couple of new investment funds in consumer, gaming, infrastructure, and DeFi technologies. The $380 million preliminary phase fund will focus on pre-seed and Series A rounds for younger businesses and technologies. This fund comes after the company’s fifth early-stage fund, which was created in June 2021 and valued at $300 million. The second, a $200 million opportunities fund, will focus on Series B and further late-stage investments, giving access to businesses with significant prior funding. Taking the two funds together, Blockchain Capital has raised $580 million successfully as of yet.
Plans for the Investment Funds
Blockchain took to popular social media platform X to announce the great news. They posted, “We’re thrilled to share the closing of 2 new funds – our 6th early stage fund and 1st opportunity fund. Together, they total $580 million and serve to reinforce our commitment to leading the global transition to decentralized, blockchain-based systems.”
Blockchain Capital also stated the following in a press release: “The end game is to elevate personal empowerment by granting individuals control over their digital and financial lives through innovative blockchain-enabled applications and services. This vision of a democratized and distributed future guides our passion and investment decisions.”
As Blockchain Capital raises $580 million, the funding allotted will focus on six important industries: video-gaming or e-sports, decentralized infrastructure, centralized infrastructure, consumer/social technologies, and decentralized finance. Despite last year’s relatively quiet digital asset market, this successful fundraising indicates a persistent interest in investments. In 2022, the cryptocurrency market suffered difficulties that culminated in FTX’s collapse in November.
Since then, digital assets have had a difficult time escaping a constrained trading range, especially Bitcoin (BTC), which has spent the last six months stuck between $25,000 and $30,000 in price.
Blockchain Capital stated, introducing these investment funds, “Over the past 20 months, we’ve invested more capital into the next generation of innovators than any other time in our history.” The company also added to the press release about the cryptocurrency market’s very substantial turbulence these past 20 months, which revealed the hazards of short-term thinking and exposed many who “misjudged this nascent technology,” according to the firm officials.
A significant shift in investment strategy
As Blockchain Capital raises $580 million, it effectively closed some of the largest funds in Bitcoin and blockchain history, which is a significant accomplishment for the company.
This shouldn’t be interpreted as a sign that the company intends to keep increasing the amount of its funds, though. One of the partners, Spencer Bogart, highlighted that the company has no plans to diversify into industries like artificial intelligence or turn into a hedge fund dealing in tokens. He added that it is unlikely that future investments will be considerably more important than those that have just been closed.
Blockchain Capital has changed its strategy and is now in charge of “most” of the rounds in which it participates, providing more than 50% of the money, setting terms, creating pricing agreements, and securing board seats.
What Does the New Approach Mean?
With this change in strategy, the company is now able to grow the size of its funds, exert more governance control, and take advantage of more allocation opportunities across different investments.
Traditional institutional investors, such as financial institutions, university endowments, U.S. pension plans, sovereign wealth funds, and private foundations – make up the majority of its limited partners. The company also works with innovative, strategic investors who are innovators in their fields. These strategic investors frequently approach funding commitments in a more targeted manner.
In 2021, the fifth early-stage financing from Blockchain Capital included payment goliaths Visa and PayPal. Even if they aren’t to the new funds, their participation highlights the attention to and backing from reputable financial industry companies. Nevertheless, the long-term focus of Blockchain Capital’s funds encourages long-lasting alliances that can provide growth prospects and raise the standing of the companies and protocols in the fund’s portfolio in the marketplace.
Recent fundraising rounds managed by Blockchain Capital include a $115 million Series C investment in Tools for Humanity, a Worldcoin developer, and a $40 million Series A investment in RISC Zero, a provider of crypto infrastructure.