The firm is allocating up to $600 million for a sub-fund that will primarily, though not exclusively, invest in liquid tokens and digital assets. The move allows Sequoia to ramp up crypto investing beyond fiat currencies and build on its recent momentum in the sector.
Sequoia hasn’t always been so committed to crypto. Following a string of cryptocurrency and blockchain deals in 2018, the investor took a hiatus before returning in 2021, according to PitchBook data. Some of the firm’s largest recent deals include a $420 million round for trading platform operator FTX and a $310 million deal for asset management platform provider Fireblocks.
The crypto vehicle is the smallest of three new sub-funds. Sequoia is putting up to $950 million into a fund-of-funds dubbed the Ecosystem Fund, as well as up to $3.5 billion into its growth-focused Expansion Fund, Axios reported. Under the new fund structure, Sequoia will operate a single master fund that isn’t bound by a 10-year holding period and will allocate capital to the family of sub-funds.
The move into cryptocurrencies was expected following Sequoia’s decision to become a registered investment advisor. Andreessen Horowitz and General Catalyst are among the other VC firms that have adopted the RIA structure.
Sequoia has been working to brand itself as a crypto investor in other ways too. In December, it sold an NFT of a memo about its 2005 YouTube investment for more than $800,000. It also briefly snuck the term DAO, short for decentralized autonomous organization, into its Twitter bio.
Sequoia said that crypto bets accounted for 20% of its investments in the past 12 months.
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