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Yesterday, the world of cryptocurrency witnessed a stunning financial development. Polychain Capital and Coinfund, two major players in the crypto venture capital arena, have managed to collectively amass a whopping $352 million. This staggering figure was achieved through the concerted efforts of both firms to generate funds for their respective new investments.
Polychain Capital, an industry titan, has reached an agreement with investors that brought in a cool $200 million in the initial round of its fourth fund. Despite this significant achievement, the firm remains ambitious with plans to double this figure to an impressive $400 million. This is in line with the company's shift in investment strategies, which recently led to a reduction in its research team.
These funds add to Polychain's impressive portfolio, already standing at $2.6 billion in assets managed across three different funds, as per Pitchbook data.
On the other hand, Coinfund, another stalwart in the crypto venture capital world, has managed to raise an impressive $152 million for its fourth seed fund, surpassing its initial target of $125 million. Coinfund's CEO, Jake Brukhman, attributed the surprising increase in funding to a recent uptick in industry interest.
Despite these significant achievements, the overall climate for crypto and Web3 startup investments has seen a significant downturn. Crunchbase data reveals a sharp 76% decline in total venture funding volume compared to this time last year.
The sharp downturn in the crypto industry follows recent high-profile project collapses including Do Kwon’s Terra Money ecosystem and Sam Bankman-Fried’s FTX, sparking wariness among investors. This reticence has prompted a return to more traditional market sectors, with venture capitalists adopting a more cautious stance.
One notable outlier in this downward trend is the AI industry, which has seen more than $12 billion in venture funding since the beginning of the year as investors scramble to capitalize on this emerging sector.
