December 9, 2023

Venture capital firms Coinfund and Polychain Capital have managed to raise a combined $350 million in their latest funding round, showing renewed confidence in the cryptocurrency space.

Coinfund raises $152 million

New York-based venture capital firm, currency fund, which managed to raise $152 million in its latest funding round, has shown confidence in the cryptocurrency space despite recent withdrawals from many investors. Known for its portfolio of 105 companies, the firm prioritizes projects that help grow crypto infrastructure, with a particular focus on achieving greater decentralization.

Polychain raises $200 million of $400 million goal

In a similar sequence of events, another blockchain-based venture capital firm, Julian Capitalalso completed its first closing, raising about $200 million for its fourth cryptocurrency venture capital fund.

The fund’s overall target is set at $400 million, in line with the amount specified in the Polychain Ventures IV (parallel) LP fund filing with the SEC in April.

The venture capital firm, which manages nearly $2.6 billion in assets, struggled during the crypto winter and had to lay off staff, like many other crypto-focused organizations. Cryptocurrency investment took a major hit last year, with funding for cryptocurrency projects shrinking to just $1.7 billion from $9.1 billion a year earlier.

However, a recent ruling in favor of cryptocurrencies in the SEC v. Ripple case has reignited interest in cryptocurrencies, with Coinbase shares hitting yearly highs.

Coinfund continues to bet on cryptocurrencies

Coinfund has invested heavily in companies like Giza, an artificial intelligence-focused venture that raised about $3 million in seed funding, and Cosmos, which helped raise $10 million to collaborate on advancing its Neutron The smart contract platform is developed in collaboration with Binance Labs and other institutions.

The latest move by Coinfund comes amid a challenging year for cryptocurrency investing, which saw a broader retreat following multiple failures (including the collapse of the TerraLuna stablecoin and the FTX exchange). In addition, higher interest rates make borrowing more expensive, complicating the financing environment.

Focus on scalability, interoperability

Alex Felix, co-founder and chief investment officer at Coinfund, explained that the debacle of cryptocurrency exchange FTX last year caused developers to redouble their efforts to complete the roadmap of the decentralized application developer stack. As a result, scalability, interoperability, and user experience have become new areas of focus.

While previous funding rounds have largely focused on established categories like NFT games and DeFi, this latest round will shift the focus to emerging industries, especially early-stage crypto startups, especially those involving artificial intelligence.

Disclaimer: This article is for informational purposes only. It does not provide or be intended to be used as legal, tax, investment, financial or other advice.