The crypto bear market may be ongoing, but Blockchain Capital is still going big. It closed two new funds for a total of $580 million, the firm’s general partner Spencer Bogart told TechCrunch.
The two venture funds, its sixth early-stage fund and its first “opportunity fund,” are allocated roughly two-thirds and one-third of the $580 million, respectively, Bogart said. The firm’s last investment vehicle, its fifth early-stage fund, was $300 million in June 2021.
“It’s doing more of what we’ve been doing for the past decade,” Bogart said. “This is our bread and butter, and we wanted to stay aligned with LPs [and] think about prior fund sizes, but still grow a bit.”
The funds will focus on six sectors: decentralized finance, centralized finance, centralized infrastructure, decentralized infrastructure, gaming and consumer/social.
When thinking about fund size, Bogart said that a $2 billion fund would be too large in the current crypto investment climate. “It’s tough to find places to invest [that amount] while still having high conviction.”
Its LPs are separated into two categories: strategic LPs, like Visa and PayPal, and long-term committed capital like university endowments, family offices and sovereign wealth funds that will continue to sign up for funds “as long as we produce returns.”
“The strategic partners like Visa and PayPal are more limited because it’s more active,” Bogart said. “It’s not just an LP investment; they don’t care about returns as much, but want us to be the eyes and ears on the ground for who else they should work with.”
The opportunity fund will be used to put capital into projects that the firm might have missed the chance to invest in during their seed or Series A rounds.
The firm plans on deploying the capital roughly over a three-year period, but can move as fast as two years or up to five, depending on the opportunities.
Blockchain Capital hasn’t always led rounds, but now it’s leading “most” of the rounds it participates in, Bogart said. This means Blockchain Capital is typically committing over 50% of the funding rounds it’s involved in, while also pricing the deal and writing the term sheet — all while taking a board seat. “That’s a shift for us that allows us to increase fund sizes and have a say in financing, real governance oversight and opens up more allocation opportunities.”
As for what’s next? The firm plans to continue investing in blockchain-based startups with a long-term vision, similar to what it has been doing for the past 10 years.
“There’s always been temptation across VCs to experiment in new sectors, but we have no intent to expand and become an AI fund or hedge fund and trade tokens,” Bogart said. “We want to keep fund size relatively constrained; we don’t see them becoming much larger than what you see here.”