Polychain Capital Raises $200 Million In First Close Of New Crypto Venture Capital Fund

Key Points:

• Polychain Capital secures $200 million in the initial close of its fourth crypto venture capital fund.
• The raise indicates continued interest in the crypto industry despite the challenging market conditions.
• The prominent VC firm, founded by early Coinbase employee Olaf Carlson-Wee, plans to raise a total of $400 million for its fourth fund.

According to Fortune, Polychain Capital, a leading blockchain-focused venture capital firm, has achieved a significant milestone by raising approximately $200 million in the initial close of its fourth crypto venture capital fund.

The firm is targeting a total raise of $400 million for this fund, as stated in its filing with the U.S. Securities and Exchange Commission. While the fund had not raised any capital at the time of the filing, the successful first close demonstrates a strong investor interest in the crypto sector.

Founded in 2016 by Olaf Carlson-Wee, the first employee of Coinbase, Polychain Capital has emerged as a prominent player in the crypto venture space. The firm has made strategic investments in notable projects such as the decentralized exchange Uniswap and the African crypto exchange Yellow Card. Its success and influence were recognized when it was included in the inaugural Fortune Crypto 40 list this year.

With approximately $2.6 billion in assets under management, according to Pitchbook data, Polychain has previously raised three funds. However, the firm’s asset value is subject to fluctuations due to its liquid token hedge fund. Despite challenges faced during the crypto market downturn in 2019, Polychain’s assets under management fared better than the aggregate value of cryptocurrencies, showcasing its resilience and expertise in navigating the market.

After deploying most of the capital from its third fund over the past two years, Polychain turned its attention to raising funds for its fourth venture capital fund. The successful first close of $200 million signifies that the firm has secured agreements with investors, or limited partners, to begin deploying capital. However, Polychain will continue its fundraising efforts to reach the target of $400 million.

The achievement of raising $200 million is not only a positive signal for Polychain Capital but also for the broader crypto venture capital landscape. Data from Pitchbook reveals that global crypto VC firms raised only $1.7 billion across 12 funds in the first half of 2023, compared to $22.5 billion across 91 funds throughout 2022. This highlights the significance of Polychain’s accomplishment amidst the current market conditions.

Alongside the successful raise, Polychain Capital has made some adjustments to its team. The firm reportedly let go of three members of its research team, aligning its resources with new investing priorities. As it enters a new phase of growth with its fourth fund, Polychain is adapting its strategy to continue identifying promising projects and driving innovation within the blockchain and cryptocurrency ecosystem.

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