Hedge fund Polychain Capital has raised $200 million for its fourth crypto VC fund. The company has focused on some altcoin projects for investment. Also, the crypto investment firm has gone through personnel changes.
Leading crypto investment firm raises $200M
Polychain Capital, one of the leading venture capital firms in the crypto space, has raised nearly $200 million in the “first close” of its fourth fund, according to sources. It also fired three members of its research team due to new investment priorities. The company still plans to raise about $400 million in total for the fourth fund. This fund demonstrates continued interest in the industry despite a “Crypto Winter” that has seen venture financing evaporate for startups and VC firms alike. It is also a bullish sign for the industry.
Olaf Carlson-Wee, Coinbase’s first employee, founded Polychain Capital in 2016. The company has quickly become a leader in the crypto enterprise space. As you follow on Kriptokoin.com, the firm pioneered investments in companies such as Uniswap (UNI). Meanwhile, Polychain was involved in the launch of Fortune Crypto 40 this year.
Polychain targets $400 million for its fourth fund
According to data from Pitchbook, the number is prone to fluctuations due to Polychain’s liquid token hedge fund. However, Polychain has raised three funds with $2.6 billion in assets under management. In 2019, the Wall Street Journal reported that its assets under management fell 40%, or nearly $400 million, amid the crypto market downturn, but outperformed the combined value of cryptocurrencies, which dropped 70% over the same period.
Polychain has distributed most of the capital after raising a third fund in 2022 and 2023. Sources reported that in March 2023, Polychain is targeting $400 million for its fourth fund. The source said the target amount was “a little less” than $400 million. While Polychain’s successful $200 million initial fund will continue to raise money from investors for its fourth fund, it means it has signed deals with investors or limited partners to begin raising capital. This fund is a positive signal for crypto VCs.
Personnel exchange and altcoin projects in focus
Meanwhile, the new funding came with a jolt in Polychain’s small team of around 25 people. With the change, about 15 people will focus on research. As the firm prepares for its fourth fund, it laid off three employees from its research team. According to sources, it has recruited a new staff. On the other hand, general partner Niraj Pant left to start his own project.
Polychain’s new fund will come with a different focus as the firm tries to navigate the bear market. The staff change reflects changing priorities with new researchers brought in because of their background in data science. Sources say Polychain will look specifically at Ethereum-based projects. He states that he will approach similar investments in Arbitrum (ARB) and Scroll (SCRL), both layer-2 networks on Ethereum, and EigenLayer, an Ethereum re-stake protocol.
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