According to reports, leading crypto venture capital firm Polychain Capital has secured $200 million in its fourth funding fund. Citing sources familiar with the matter, Fortune Crypto said the VC firm laid off three members of its research team while resetting its investing priorities.
Polychain Capital is looking to increase its investment momentum in the crypto space. And while the $200 million has closed in its fourth fund, the company targets to raise $400 million, with more funding rounds underway.
The “first close” implies that Polychain has signed agreements with investors and can start issuing funds to crypto startups and projects.
Polychain Capital Sets The Pace For A Comeback As VC Firms Recede From Crypto
The Venture Capital ecosystem stalled in its activities in the past year amid a bearish crypto market and cloudy regulatory atmosphere. The struggle for comprehensive regulatory guidance for the crypto market heightened tensions, with the US Securities and Exchanges Commission (SEC) in the cross-chairs with crypto service providers.
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While the industry experienced some mild growth and VC activities this year, most stakeholders focused on bringing regulatory clarity. However, people speculate the tension might loosen and institutional interest in crypto increase if the SEC approves the US’ first spot Bitcoin ETF.
While the focus on VC funding is currently low, Polychain Capital’s $200 million fund round suggests the digital assets landscape is starting to look beyond the crypto winter, pushing toward future growth.
Polychain Capital has accelerated efforts to lead the venture capital ecosystem with its latest significant funding rounds. Besides the latest $200 million, the VC firm has raised three funds with over $2.6 billion in assets under management, according to Pitchbook data.
Other VC firms have followed suit as a July 18 tweet revealed the VC firm Coinfund raised $158 million for its fourth seed funding round. According to Bloomberg’s report, Coinfund CEO Jake Brukham said the company planned to raise $125 million but ended up with $158 million due to increased interest in crypto.
AI Outpaces Crypto In Venture Capitalist Funding Amid Bearish Market
Meanwhile, data from the Cruchbase analytics firm shows the total volume of VC funding for Web3 and crypto startups declined by 76% from Q3 2022. Top investors became wary of the crypto industry after the collapse of Terra and FTX and other similar incidents in the past year.
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These unfortunate incidents caused investors to retreat into more traditional markets while avoiding investment in novel industries, except artificial intelligence (AI). The AI industry stole the show from crypto, with over $12 billion in VC funding as of January 1, 2023, according to Crunchbase’s July 6 report.