Sequoia Capital, one of the world’s oldest and most successful venture capital firms, has announced the launch of a new cryptocurrency-focused fund. This will be the venture capital firm’s first sector-specific fund since its inception in 1972.
In an interview with The Block, Shaun Maguire, Partner at Sequoia Capital, stated that the Sequoia Crypto Fund will primarily invest in “liquid tokens,” which are tokens that are already listed on cryptocurrency exchanges and those that are yet to be listed.
The fund is $500-600 million in size and is part of the larger Sequoia Capital Fund, which was formed in October 2021 as part of the VC firm’s restructuring. The Sequoia Capital Fund now owns all of the firm’s investments in the United States and Europe, including stakes in publicly traded companies.
In addition to the crypto sub-fund, Sequoia stated that it will continue to invest in cryptocurrency startups through its main seed, venture, growth, and expansion funds, which have a total capital commitment of over $7.5 billion.
Sequoia is not a newcomer to the cryptocurrency space. Since 2015, the VC has been investing in cryptocurrency in both equity and token deals. Last year, the cryptocurrency space accounted for 20% of the firm’s new investments in the US and Europe.
FTX, Fireblocks, StarkWare, and Filecoin are among its portfolio companies. When asked why they’re launching a crypto-focused fund now, Shaun Maguire explained that many founders have increasingly asked Sequoia to take a more active role in token management.
The company will now begin staking tokens, providing liquidity, participating in governance, and trading them in addition to investing in and holding them. According to the company, their network of builders at Ethereum, Solana, major DeFi protocols, and elsewhere urged them to do the same.
Michelle Bailhe, another crypto-focused partner at Sequoia, told The Block in the interview that crypto is still in its early stages and will only grow from here.