In the midst of a prolonged crypto bear market, Blockchain Capital has proven its resilience, closing two substantial new funds amounting to a total of $580 million, as confirmed by the firm’s general partner, Spencer Bogart, in an exclusive statement to TechCrunch.
These two newly established venture funds, comprising the sixth early-stage fund and the inaugural “opportunity fund,” are allocated approximately two-thirds and one-third of the $580 million, respectively, according to Bogart. This milestone follows the firm’s previous investment vehicle, the fifth early-stage fund, which amounted to $300 million in June 2021.
Bogart emphasized, “This is our bread and butter, and we wanted to stay aligned with LPs [Limited Partners] [and] think about prior fund sizes, but still grow a bit.” The funds’ primary focus will be on six key sectors: decentralized finance, centralized finance, centralized infrastructure, decentralized infrastructure, gaming, and consumer/social.
In assessing the ideal fund size, Bogart asserted that a $2 billion fund would be unwieldy in the current climate of crypto investment. He noted, “It’s tough to find places to invest [that amount] while still having high conviction.”
Blockchain Capital’s LPs are divided into two distinct categories: strategic LPs, including industry giants like Visa and PayPal, and long-term committed capital from sources such as university endowments, family offices, and sovereign wealth funds, which demonstrate a sustained interest in investing as long as consistent returns are delivered.
The newly established opportunity fund is poised to inject capital into projects that the firm may have initially overlooked during their seed or Series A rounds. The deployment of this capital is projected to span a period of approximately three years, though the firm maintains flexibility to expedite the process within two years or extend it up to five, contingent on emerging opportunities.
A noteworthy shift for Blockchain Capital is its newfound role as a leading participant in the rounds it engages in. Bogart disclosed, “We’re now leading ‘most’ of the rounds we participate in.” This entails a commitment of over 50% of the funding rounds, coupled with setting the deal terms and taking a board seat. This strategic shift empowers Blockchain Capital to augment fund sizes, exercise genuine governance oversight, and broaden allocation opportunities.
Looking ahead, Blockchain Capital intends to persist in its investments in blockchain-based startups, adhering to a long-term vision, mirroring its steadfast approach over the past decade. Bogart affirmed, “We want to keep fund size relatively constrained; we don’t see them becoming much larger than what you see here.”
Despite the prevailing challenges within the crypto market, Blockchain Capital’s recent successes underscore its unwavering commitment to nurturing and propelling innovation within the blockchain space.