Polychain Secures $200 Million for New Crypto VC Fund, Initiates Staff Reorganization
Polychain Capital, a prominent venture capital firm in the cryptocurrency industry, has raised approximately $200 million in the first stage of funding for its fourth fund, according to an anonymous source. The firm aims to raise a total of $400 million for the fund. This successful raise indicates continued interest in the crypto sector, despite the recent decline in venture funding known as the “Crypto Winter.” Polychain Capital, founded in 2016 by Olaf Carlson-Wee, the first employee of Coinbase, has emerged as a leader in the crypto venture space. The firm has made investments in companies like Uniswap and Yellow Card, and was included in the inaugural Fortune Crypto 40 list this year. With three previous funds, Polychain Capital has managed around $2.6 billion in assets, although this figure can fluctuate due to the firm’s liquid token hedge fund. In 2019, its assets under management decreased by 40% due to a crypto market downturn, but still outperformed the overall drop in cryptocurrency values. The success of the first close of $200 million means that Polychain Capital has secured agreements with investors and can start deploying capital. However, the firm will continue to raise funds for its fourth fund. This achievement is particularly encouraging for crypto venture capitalists, as data from Pitchbook reveals that the global crypto VC sector only raised $1.7 billion in the first half of 2023, compared to $22.5 billion raised in 2022. Polychain Capital’s staff also experienced some turnover as a result of the fresh funding. Three members of the research team were let go, and one new researcher with a background in data science was hired. This reflects the firm’s new focus on Ethereum-based projects as it navigates the bear market, including investments in Arbitrum, Scroll, and EigenLayer.