Polychain Capital Raises $200M amid Decline in Venture Funding

Polychain Capital, one of the leading crypto-focused venture capital (VC) firms, has raised $200 million in what is only the initial phase of its fourth crypto fund. According to a Fortune report which cited an inside source, the firm remains intent on raising $400 million in total for the fund.

Additionally, Polychain Capital has also carried out some staff changes. The blockchain-focused VC released three members of its 15-man research team, citing a change in its investment focus.

But despite the change, Polychain Capital appears to be maintaining a strong interest in the crypto industry. Particularly, at a time when VC funding for crypto-based businesses is at its lowest level in two years. As Coinspeaker earlier reported, crypto VC funding in the first quarter of 2023 was only $2.4 billion. Therefore, marking an 80% decline from the record $12.3 billion it saw in the same period last year.

It must be noted, however, that the declining VC funding is not unrelated to the prolonged crypto winter that has put pressure on all sides of the investment landscape. That includes both the startups and the venture capital firms that support them.

Polychain Capital was founded in 2016 by Olaf Carlson-Wee, who was Coinbase’s first employee. Although it operates like a traditional VC, it focuses exclusively on crypto and blockchain-based businesses.

So far, Polychain Capital has funded several leading blockchain firms and decentralized platforms, such as Uniswap and Yellow Card. But beyond investing in other firms, the firm also operates a liquid token hedge fund. That is, it has a variety of tokens in its holdings that it invests in.

According to Pitchbook data, Polychain Capital currently has about $2.6 billion in assets under management (AUM).

As of publication, Polychain Capital is yet to respond to a request for comment on its new raise. However, more information will be shared as soon as they are available.