With the crypto world seemingly stabilising after a rather chaotic early year, crypto startups are back to mushrooming globally, and so is the capital waiting to be invested in them. Leading crypto-native investment and VC firm CoinFund announced the close of its CoinFund Seed IV LP. The size of the Seed IV exceeded its initial target fundraising goal of $125 million to amount to $158 million – something that will be utilized towards backing early-stage crypto startups after a period of intense volatility in the crypto sector.
The Seed IV fund received the backing of several institutional investors, family offices, and high net worth individuals (HNIs), and is set to support pre-seed and seed stage investments in up-and-coming players across the web3 ecosystem, as well as continue to make token investments. So far, CoinFund has backed the likes of Dapper Labs and Blockdaemon with its previous funds.
The fund comes after the previous quarters (over a year, in fact) have been less than kind to the crypto industry. The period saw the crypto market experience significant downturns as the likes of Bitcoin and other major cryptocurrencies lost a significant portion of their market caps since their all-time highs – a drop of 60%, as of May 2023. The total market cap of the crypto market lost considerable ground, and events such as the demise of the TerraUSD stablecoin, rising interest rates, and the collapse of Three Arrows Capital hedge fund continued to pile up on its misery.
Another major obstacle faced by the crypto industry in recent times is the dramatic collapse of major cryptocurrency exchange FTX, which triggered a slide in cryptocurrency prices that wiped out billions of value from digital assets, as well as further decreased investor confidence. This, and other factors resulted in a steep drop in the total amount of VC investments in crypto startups across the world.
Amidst all this, CoinFund managed to raise $550 million, according to CoinFund CEO Jake Brukhman, who claimed that 2022 as “an exceptionally difficult year.” “As CoinFund enters its ninth year, we continue to raise the bar for ourselves, our investors, and our portfolio companies,” Brukhman said. In a time when some may be cautious due to recent industry challenges, CoinFund’s ability to attract significant investment underscores the ongoing potential and long-term value of the crypto industry. The successful fundraising highlights the confidence investors have in the firm’s ability to identify promising crypto startups and support their growth, which will be beneficial for the crypto and web3 ecosystem as a whole as well.
“Our investors have shown deep confidence in our people and strategy by continuing to allocate capital to our products in a bear market. Over the last two years, we’ve built a truly institutional grade firm, the model of a large professional manager in web3. On the portfolio side, we are more bullish on the industry than ever and continue to invest in platform resources and personnel to help navigate a nascent and sometimes opaque category and support the growth of each portfolio company. CoinFund is proud to identify and back emergent teams and technologies before they trend,” he added.