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In response to a substantial shift within the startup ecosystem, Sequoia Capital, a famend enterprise agency, has considerably scaled again its cryptocurrency fund.
In response to people aware of the matter, the fund has been minimize from $585 million to a leaner $200 million, as reported by the Wall Road Journal (WSJ.)
This substantial discount is a part of an intensive downsizing technique that the agency is implementing because it grapples with challenges within the startup business.
The WSJ famous that Sequoia’s resolution to downsize its funds, shared with its traders earlier this yr, was pushed by a change in market dynamics. The enterprise agency goals to adapt its method to higher align with the evolving panorama, planning to pay attention extra on backing early-stage startups.
In response to the Monetary Instances, Sequoia is retrenching in gentle of a steep inversion in personal markets, and this transfer can also be designed to offer liquidity to its restricted companions.
Sequoia’s discount just isn’t confined to its cryptocurrency fund alone. In response to WSJ, the agency additionally trimmed its ecosystem fund, which invests in different enterprise funds, from $900 million to $450 million.
The downsizing of its crypto funds comes within the wake of previous crypto setbacks. Notably, in Nov. 2022, the agency needed to write off its over $200 million funding in FTX, the cryptocurrency alternate, as nugatory.
Regardless of operating due diligence when FTX’s income was roughly $1 billion, its collapse led to its worth diminishing. Nonetheless, Sequoia highlighted that its publicity to FTX was lower than 3% of its International Development Fund III, and the loss was mitigated by features of $7.5 billion from the fund.
In response to the WSJ, Sequoia has maintained that it would nonetheless spend money on crypto by way of its different funds.
The submit Sequoia Capital scales again crypto fund by $350M amid business challenges – experiences appeared first on CryptoSlate.
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