Crypto venture capital firms Polychain Capital and Coinfund have collectively raised over $350 million in funding.
Polychain Capital secured $200 million for its fourth investment fund in a recent “first close,” signaling that agreements have been made with investors and the funding process for startups and projects can begin.
Although the firm still aims to raise a total of $400 million for the fund, it has shifted its investment priorities and consequently had to release three members of its research team.
Polychain Capital currently manages three funds with approximately $2.6 billion in assets under management, as per Pitchbook data.
Despite a decline in venture capital funding for crypto projects over the past year, Coinfund managed to raise $152 million for its fourth seed fund.
The CEO, Jake Brukhman, initially targeted $125 million but exceeded expectations by attracting an additional $27 million due to renewed interest in the industry.
However, overall venture funding for crypto and Web3 startups has seen a 76% decrease compared to the same period last year, according to data from Crunchbase.
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Investors have become cautious in the wake of high-profile project failures, such as Do Kwon’s Terra Money ecosystem and Sam Bankman-Fried’s FTX.
Consequently, venture capitalists have shifted their focus towards more traditional market sectors, resulting in reduced investments across the board, except for the flourishing field of artificial intelligence.
The AI industry, in particular, has attracted significant attention from investors, with over $12 billion in venture funding pouring in since January 1.
Recognizing the immense potential and growth prospects in the nascent AI sector, investors have been eager to capitalize on this emerging field.
The recent fundraising achievements by Polychain Capital and Coinfund demonstrate that, despite the overall decline in crypto venture capital funding, there are still notable exceptions where funds are successfully raised.
The shifting investment landscape and cautious approach of venture capitalists highlight the need for careful evaluation and scrutiny of potential projects in the crypto sector.
Meanwhile, the AI industry continues to be a focal point for investors, indicating their ongoing interest in technological advancements and disruptive innovations.
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