Sequoia Capital Is Launching A $600M Fund To Invest In Crypto Tokens
Silicon Valley venture capital firm Sequoia Capital has launched a new fund to invest exclusively in cryptocurrency, with up to $600 million funding.
Sequoia Capital, one of the world’s oldest and most successful venture capital firms, is launching a fund of as much as $600 million focused on crypto asset investments. The firm is seeking to buy crypto tokens and use them in activities such as staking and voting on governance proposals.
Sequoia, which primarily focuses on technology, announced a fund of as much as $600 million solely focused on cryptocurrencies Thursday. The new fund will primarily consist of investments directly in crypto assets, which it will use to earn yield through token staking or influencing governance proposals in DAOs.
Shaun Maguire, partner at Sequoia, commented:
“We have a long-term view on crypto that it’s a mega-trend over the next 20 years. It’s the future of money.”
According to the announcement:
“Sequoia Crypto Fund complements our broader commitment to crypto. Our goal with this fund is to participate more actively in protocols, better support token-only projects, and learn by doing ourselves.
We remain committed to working collaboratively with the crypto community, including providing ongoing support for open-source research.”
The fund will take a more active approach in managing its holdings, a development enabled by Sequoia recently becoming a registered investment advisor. The investments will not come from Sequoia’s seed or venture or growth funds. Instead, the firm wants to use the assets in the fund for staking and voting on governance proposals.
Sequoia has been investing in crypto since 2015 in both equity and token deals. Last year, 20% of the firm’s new investments in the US and Europe were in crypto. Its portfolio companies include FTX, Fireblocks, StarkWare, and Filecoin. When asked why it was launching a crypto-dedicated fund now, Maguire said many founders have increasingly asked Sequoia to take a more active role in managing its tokens. “This new fund gives us the flexibility to engage even more deeply,” he said.
That means instead of just investing in and holding tokens, Sequoia will now start staking them, provide liquidity, participate in governance and trade them. “Our network of builders at Ethereum, Solana, major DeFi protocols, and beyond have urged us to do the same,” said Sequoia.
While Sequoia’s new $600 million fund is large, FTX Ventures, Paradigm, and Andreessen Horowitz have all announced bigger crypto funds in recent months, at $2 billion, $2.5 billion, and 4.5 billion, respectively.
