Once dubious, traditional venture capital firms are more at the forefront of crypto transactions – Crunchbase News

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Editor’s Note: This is Mergers & Money, a monthly column by senior journalist Chris Metinko that covers venture capital transactions and flows.

So far this year, crypto startups have received nearly $ 16 billion in funding, far surpassing any previous year.

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As interest and acceptance in crypto has grown among the general public – Bitcoin hit a new high of over $ 66,000 this week – this is also true among many traditional VC firms that apparently had a lukewarm feeling for the industry not so long ago.

In the past, crypto was dominated by industry-focused venture capitalists, but this year has seen increased involvement of large venture capitalists often associated with other large categories of consumer tech and technology. business. Although companies such as Andreessen Horowitz are not new to the crypto space – he was an initial investor in Coinbase and this summer announced its third crypto fund, a $ 2.2 billion tranche – of Numerous cohorts of big names in the investment world, such as Tiger Global Management, Coatue, Lightspeed Venture Partners and others, are participating in rounds at a rate never seen before.

Lead the charge

Many of these more traditional VC firms have likely been drawn into the crypto world by currency legitimization over the past couple of years.

While once questioned by many and seen as a financial tool used only by cybercriminals, the more recent acceptance of cryptocurrency by major banks, investment institutions, and businesses appears to have ushered in a number of new investors.

Large financial services companies like Visa and PayPal have helped validate the industry, and even Facebook is considering building its own digital wallet and currency, now called Diem. Big crypto players such as Coinbase – with a market cap of $ 65.5 billion – Circle and Robinhood have gone public, further justifying the space and showing venture capitalists the size of the space and the volume of transactions they process.

These events likely caused many of these large, growing companies to double or triple – or 7 times in Tiger’s case – their bets in the crypto world of years past.

Many of these companies are not only increasing the number of crypto companies they invest in, but also bringing with them the important growth equity controls that have helped push venture capital funding to unprecedented levels. previously in space, helping to create over 25 new unicorns this year alone.

Those big checks allowed these companies to take the lead – or co-lead – in many of these rounds, and produced high valuations that only a few crypto companies had reached before. Companies such as Andreessen Horowitz, Tiger Global, and Coatue have led more crypto rounds this year than ever in their corporate history.

Some of the great rounds led or co-led by those not normally associated with the crypto space this year include:

MoonPay, a Miami-based crypto payment infrastructure developer, reportedly raised $ 400 million in funding led by Tiger Global and Coatue earlier this month. The deal is said to have valued the company at $ 3.4 billion. New Jersey-based cryptocurrency lender BlockFi raised a $ 350 million Series D led by Tiger Global, Bain Capital Ventures, partners of DST Global and Pomp Investments in March for a valuation of $ 3 billion . New York-based Fireblocks, which helps solve a variety of digital asset business issues, from security to compliance to governance, has raised a $ 310 million Series D co-led by Sequoia Capital, Coatue, Stripes, Spark Capital, DRW Venture Capital and SCB 10X at a valuation of $ 2.2 billion in July. Lead the charge

So far this year, there have been 39 major growth cycles of $ 100 million or more in crypto, including 14 led or co-led by the companies mentioned above, according to data from Crunchbase. Last year saw only seven such cycles, including one led or co-led by one of these companies, and in 2019 the crypto space saw eight major growth cycles with just one led by these companies.

These numbers further indicate how much money many of these companies are bringing in through deals, which crypto had not seen until this year.

The nearly $ 16 billion in venture capital invested in crypto so far this year eclipses the $ 3.7 billion invested all last year. The amount of money in rounds led this year in crypto by Coatue, $ 1.9 billion; Tiger Global, $ 1.4 billion; and Andreessen Horowitz, $ 759 million, alone exceeds all funding last year.

As some uncertainty hangs over the industry due to China making crypto transactions illegal and talking about new government regulations in the United States, large venture capital firms now seem more certain than crypto. is a great economic opportunity not to be missed.

Even though many seemed uncertain just a few years ago.

Methodology

Crypto, as defined in this article, includes startups in the Crunchbase dataset that work in the cryptocurrency and blockchain industries.

Illustration: Dom Guzman

Keep up to date with the latest rounds of fundraising, acquisitions and more with Crunchbase Daily.

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