Sequoia Cuts Its Crypto Fund by 66% After Industry Collapse: Report

The $85 billion venture capital firm launched the Sequoia Crypto Fund in February 2022.

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Venture capital giant Sequoia Capital has reportedly cut its cryptocurrency fund from $585 million to $200 million, amid liquidity shortages and a shift to smaller crypto players.< /p>

According to a July 27 Wall Street Journal report, the tech-focused venture capital firm told investors in March that it would cut its Sequoia Crypto Fund, as well as its ecosystem fund, in order to better reflect changing market conditions.

Sequoia Capital curbed crypto investments by 65%, opting for a nurturing stance on startups. Not volatile market apathy, but strategic cognition, folks! #CryptoInvestments $BTChttps://t.co/hfsAAd8jeV pic.twitter.com/8JvtyShg0n

— Chain Review (@Chain_Review) July 27, 2023

The cryptocurrency fund will now focus more on supporting early-stage startups, given the recent turmoil in the crypto industry that has removed many opportunities to back larger companies.

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Another motive behind the cuts is to lower the capital threshold and therefore the barrier to entry for investors to participate in Sequoia's fund offerings, the sources say.

“We made these changes to focus more on seed-stage opportunities and to provide liquidity to our limited partners,” Sequoia reportedly said in remarks to the Financial Times. The company added that it has returned more than $15 billion to investors over the past three years.

The company's cryptocurrency fund was launched in February 2022, when the market capitalization of the cryptocurrency market...