Dragonfly Capital Launches $650M Venture Fund

The crypto-focussed investment firm Dragonfly Capital has announced closing its third fund with $650 million in capital. Some of the limited partners were Tiger Global, KKR, Sequoia China, Ivy League endowments, Invesco, and Top Tier Capital Partners, among others.

Dragonfly Fund III

Dubbed “Dragonfly Fund III,” the fund’s valuation is twice that of the previous two, which totaled $300 million combined. According to the filing with the US Securities and Exchange Commission earlier this year, Dragonfly Capital initially intended to raise $500 million.

The focus areas of the firm’s third fund will be across all the stages of blockchain and crypto companies, protocols, and tokens that aim to develop “new digital economies.” Additionally, the new initiative is expected to enable Dragonfly Capital to lead rounds in later-stage companies.

Its managing partner, Haseeb Qureshi, revealed that the firm plans to invest in several burgeoning sectors. These include play-to-earn gaming, decentralized autonomous organizations (DAOs) infrastructure, and web3 developer tooling, in addition to decentralized finance (DeFi), smart contracts, non-fungible tokens (NFTs), and the metaverse.

Qureshi also said,

“The next generation of startup founders are now emigrating from web2. (Welcome!) The L1 wars are heating up, the race to build the metaverse is on, DeFi is maturing, crypto gaming now seems inevitable, and the financial infrastructure is institutionalizing. There’s so, so much to build, and with our Fund III, we’re better equipped to back founders all along their journey, from seed to Series B and beyond.”

Since its inception in 2018, Dragonfly Capital has been quite active in the crypto ecosystem and has backed several projects. Some of the names are Avalanche, Near, Bybit, Matter Labs, Anchorage, Amber, Frax, Cosmos, Dune Analytics, MakerDAO, Compound, and 1inch, among others.

Sequoia’s Commitment

Another evidence of the growing trend of funds and investors pouring money into the crypto sector is Sequoia Capital’s $600 million commitment via a cryptocurrency-focused fund. Sequoia, which happens to be one of the oldest and most influential venture capital firms, announced the launch of a standalone crypto fund that will focus primarily on liquid tokens and digital assets.

The Sequoia Crypto Fund is part of the 50-year-old firm’s broader structure revamp that includes enabling greater flexibility to hold positions in public companies, etc., and would be one of three new sub-funds under the primary Sequoia Capital Fund.