Blockchain Capital is raising $700 million for two new crypto investment funds, according to Bloomberg. The new capital would support both early-stage and growth-focused deals, showing that selected parts of the digital asset sector still continue to attract investor interest.
Bloomberg reported that the firm is working on its seventh early-stage fund and a separate growth fund. The early-stage vehicle would target experimental projects. The growth fund would focus on firms that already have business traction.
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The report, citing a person familiar with the matter, said Blockchain Capital previously raised $1 billion for crypto investments. The new fundraising process will be completed in the coming six months. The company has already begun to roll out some of the capital as well.
Blockchain Capital is one of the oldest venture firms in the crypto market. It operates over $2 billion in assets. Its subsidiaries consist of Coinbase and Kraken exchanges and stablecoin firms Circle and Tether.
The fundraiser is timed as crypto venture activity is sending mixed signals. Messari data shows that the average value of crypto funding has increased by almost half in the past 30 days. That indicates bigger checks in certain areas of the market.
Nevertheless, the number of funds raised has dropped drastically in April. This month, crypto projects have raised a mere $466 million. It is well below the previous $3 billion registered in March, and it is evident that the total capital flows have slowed down.
Messari remarked that the bigger picture can be stronger than it appears. Its analysts pointed out how capital concentration is greatly biased by debt deals and huge later-stage rounds. Such a trend may conceal a lower median deal environment throughout the industry.
The analysts also indicated that the majority of crypto fundraising is still within the sub-$10 million range. Massive deals have increased headline figures over the past few months. The largest transaction in the last two months was the $1 billion debt financing of Core Scientific by Morgan Stanley.
Messari has also included that certain types of businesses continue to attract a large number of investors. Crypto services that are related to fintech and institutional infrastructure are still operational. The company used examples of companies like Slash and OpenFx as those where higher-value raises continue to be offered.
Cryptocurrency fundraising is still significantly lower than previous highs in the cycles. Monthly totals were over $4 billion in November 2021 and May 2022.
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