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Sequoia Capital, a famend enterprise agency, has considerably scaled again its cryptocurrency fund in response to a substantial shift within the startup ecosystem.

In response to people acquainted with 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 in depth 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 buyers 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.

In response to the Monetary Instances, Sequoia is retrenching in gentle of a steep inversion in personal markets, and this transfer can also be designed to supply liquidity to its restricted companions.

Sequoia’s discount will not be confined to its cryptocurrency fund alone. In response to 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 operating due diligence when FTX’s income was roughly $1 billion, its collapse diminished its worth. Nonetheless, Sequoia highlighted that its publicity to FTX was lower than 3% of its World Progress Fund III, and the loss was mitigated by good points of $7.5 billion from the fund.

In response to the WSJ, Sequoia has maintained that it would nonetheless spend money on crypto through its different funds.

The put up Sequoia Capital scales again crypto fund by $350M amid business challenges – experiences appeared first on CryptoSlate.

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