Exciting news in the crypto space! Polychain Capital, a leading venture capital firm, has successfully raised approximately $200 million in the "first close" of its fourth fund. This substantial raise is a positive indicator for the crypto industry, demonstrating continued interest despite the recent "crypto winter" that impacted both startups and VC firms.
Founded in 2016 by Olaf Carlson-Wee, Coinbase's first employee, Polychain Capital has quickly emerged as a key player in the crypto venture world. The firm has made significant investments in noteworthy companies such as the decentralized exchange Uniswap and the African crypto exchange Yellow Card. Its achievements were recognized in this year's Fortune Crypto 40 list.
With three previous funds amassing around $2.6 billion in assets under management, Polychain's success hasn't come without challenges. The crypto market downturn in 2019 saw a decline in assets under management, but Polychain fared better than the overall cryptocurrency market during that period.
Having deployed most of the capital from its third fund in 2022 and 2023, Polychain set its sights on raising approximately $400 million for its fourth fund. The recent $200 million first close represents agreements with investors, signaling the firm's readiness to deploy the raised capital while continuing to seek additional investments for the fund.
In line with its evolving focus and investment priorities, Polychain has undergone a staff shakeup. The team of around 25 employees, with 15 focused on research, saw three members of the research team depart. However, the firm welcomed a new researcher with expertise in data science, reflecting its intention to explore Ethereum-based projects, including layer-2 networks like Arbitrum and Scroll, as well as the Ethereum re-staking protocol EigenLayer.
Despite the ongoing bear market, Polychain remains confident and optimistic about its fourth fund's potential. As the crypto industry continues to evolve, the firm's strategic decisions and continued investments are poised to make a significant impact on the crypto landscape.
Please note that Polychain declined to comment for this article when approached by Fortune. Nonetheless, their success in raising $200 million is undoubtedly an encouraging sign for the crypto VC sector, especially considering the recent decline in overall funding raised compared to the previous year.
