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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.
Based on people conversant in 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 12 months, was pushed by a change in market dynamics. The enterprise agency goals to adapt its strategy to higher align with the evolving panorama, planning to pay attention extra on backing early-stage startups.
Based on the Monetary Instances, Sequoia is retrenching in mild of a steep inversion in non-public markets, and this transfer can also be designed to supply liquidity to its restricted companions.
Sequoia’s discount shouldn’t be confined to its cryptocurrency fund alone. Based on 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 change, as nugatory.
Regardless of working 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 beneficial properties of $7.5 billion from the fund.
Based on 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 – stories appeared first on CryptoSlate.
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