Dragonfly Capital Seeks $500M for New Crypto Fund

San Francisco-based venture capital firm Dragonfly Capital is aiming to raise $500 million for its fourth cryptocurrency fund. According to a report from Bloomberg on September 17, the fund has already secured $250 million, reaching its halfway mark. The firm anticipates completing the fundraising by the first quarter of 2025.

Focus on Early-Stage Investments

The new fund will concentrate on early-stage investments in crypto and blockchain projects. Dragonfly has an extensive portfolio, having invested in over 100 digital asset companies, including notable names such as Ethena, Andrena, Cosmos, and Monad Labs. Previously, in 2022, Dragonfly closed its third fund, which was valued at $650 million.

Cointelegraph attempted to contact Dragonfly for further comments but did not receive an immediate response.

Insights on Ethereum from Dragonfly

In a recent interview, Dragonfly partner Anirudh Pai shared insights about the company's portfolio, highlighting Ethereum layer-2 scaling and liquidity fragmentation as significant opportunities within the industry. Pai noted, "Caldera, one of our portfolio companies, has effectively addressed the liquidity fragmentation issue on Ethereum." He also mentioned the upcoming Metalayer, designed to connect the various rollups currently existing on Ethereum.

Another project in Dragonfly's portfolio is MegaETH, which recently raised $20 million in seed funding, with participation from Ethereum creator Vitalik Buterin and Consensys founder Joseph Lubin. The MegaETH platform claims it can process 100,000 transactions per second, significantly outpacing Ethereum's native smart contract capabilities.

Venture Capital Activity Resurgence

The launch of Dragonfly's new fund coincides with a resurgence in venture capital activity in the cryptocurrency sector, largely driven by the approval of Bitcoin exchange-traded funds (ETFs) in the United States back in January.

For instance, Pantera Capital is reportedly seeking to raise $1 billion for its new Pantera Fund V, which will invest across a wide range of blockchain assets. This initiative marks one of the largest fundraising efforts in the crypto space.

Another significant player, Paradigm, recently raised $850 million for its third fund, which will focus primarily on early-stage blockchain projects. This represents Paradigm's largest capital raise since its $2.5 billion fund in 2021, with previous investments in companies like Coinbase, Uniswap, and Optimism.

Growth in Venture Capital Funding

The second quarter of 2024 saw a 2.5% increase in venture capital funding for cryptocurrency startups, indicating a robust interest in the sector as it continues to evolve and attract investment.