As the crypto market continues to deal with depressed prices, many traditional investors are shying away from the sector as they seek safer abodes for their capital. Mega VC firm Sequoia Capital is the latest to do so, with the firm paring down two major venture funds, including its crypto fund, in an effort to downsize.
Sequoia has slashed its crypto fund down by 65.8% to $200 million from $585 million, the Wall Street Journal reported, citing anonymous sources. The firm has also halved its ecosystem fund, which provides capital to other venture funds, to $450 million, the report said.
Sequoia did not immediately respond to a request for comment.
Sequoia launched the two funds in February 2022, months before the crypto market suffered a cascade of industry-crumbling events starting with the Terra/LUNA collapse. Since then, confidence in crypto has generally gone downhill and there’s been a drought of VC investments in the space.
Now, Sequoia is looking to invest in younger startups, after later-stage crypto companies like Three Arrows Capital, Voyager and FTX filed for bankruptcy.