Sequoia Capital Slashes Crypto Fund by 65.8% to $200M Amid Market Shift, Focuses on Young Startups

• ByStartupStory     |    July 29, 2023

Sequoia Capital, a renowned venture capital firm, has announced a strategic realignment of its investment focus. As part of this restructuring effort, the firm has downsized its crypto fund significantly, reducing it to $200 million, marking a 65.8% decrease from its earlier valuation of $585 million. Additionally, the ecosystem fund has also been cut down from $900 million to $450 million, according to a report by Wall Street Journal, based on information from anonymous sources.

Sequoia Capital’s shift in focus entails a move from larger companies to concentrate on younger startups. This strategic decision aligns the Silicon Valley-based VC firm with the evolving dynamics of the startup ecosystem and reflects its commitment to adapt to changing market conditions.

As part of the downsizing efforts, Sequoia Capital has made organisational adjustments, including a reduction in staff. Seven employees have been laid off, with the restructuring being attributed to the prevailing economic uncertainties.

Regarding these changes, a Sequoia spokesperson stated, “We made these changes to sharpen our focus on seed-stage opportunities and to provide liquidity to our limited partners. The crypto fund will primarily focus on new company formation, with the opportunity to supplement these investments from our seed, venture, growth, and expansion funds as the companies mature.”

Sequoia Capital launched its crypto fund in February of the previous year, amid the surging interest in the cryptocurrency space. The venture capital firm made notable investments, including a high-profile $214 million investment in FTX, a cryptocurrency firm. However, the crypto market experienced significant fluctuations, leading to the recent adjustment in the crypto fund’s size.

In line with its restructuring efforts, Sequoia Capital has recently undergone a transformation into three independent business units, catering to US/Europe, China, and India and Southeast Asia regions. The India and Southeast Asia arm has been rebranded as Peak XV Partners, enhancing its focus on serving founders and limited partners with a distinct brand identity.

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