As the crypto market continues to deal with depressed prices, many traditional investors are shying away from the sector as they seek safer abodes for their capital. Mega VC firm Sequoia Capital is the latest to do so, with the firm paring down two major venture funds, including its crypto fund, in an effort to downsize.
Sequoia has slashed its crypto fund by 65.8% to $200 million, down from $585 million, the Wall Street Journal reported, citing anonymous sources. The firm has also halved its ecosystem fund, which provides capital to other venture funds, to $450 million, the report said.
“We made these changes to sharpen our focus on seed-stage opportunities and to provide liquidity to our limited partners. The crypto fund will primarily focus on new company formation, with the opportunity to supplement these investments from our seed, venture, growth, and expansion funds as the companies mature,” a Sequoia spokesperson said to TechCrunch+ in an emailed statement.
Sequoia launched the two funds in February 2022, months before the crypto market suffered a cascade of industry-crumbling events, starting with the Terra/LUNA collapse. Since then, confidence in crypto has generally gone downhill and there’s been a drought of VC investment in the space.