Crypto-Focused Dragonfly Capital Launches Third $650 Million Fund – MovieUpdates

The crypto market shows no signs of slowing down as both funds and investors continue to pour massive amounts of capital into the ecosystem. Proof of today’s trend: Dragonfly Capital, a crypto-centric investment firm, closed its third venture fund for $650 million, the company’s managing partner Haseeb Qureshi told MovieUpdates.

The fund was oversubscribed, with limited partners including Tiger Global, KKR, Sequoia China, Ivy League Endowments, Invesco, Top Tier Capital Partners and an undisclosed Southeast Asian investment firm. According to a filing with the U.S. Securities and Exchange Commission in January 2022, the company initially planned to raise $500 million.

To date, Dragonfly has invested in nearly 60 companies through its past funds launched in 2018 and 2021 for $100 million and $225 million, respectively. Dragonfly plans to focus its investments on all stages of blockchain and crypto-native businesses, protocols, and tokens.

“We see more opportunities in the different phases and through the lifecycle of a company or protocol,” Qureshi said. “In addition, the market has grown that way. When we first started investing, the entire crypto market was a few hundred billion and now it’s in the billions.

In addition, the capital landscape has changed dramatically since Dragonfly’s previous funds, Qureshi said. “There is much more understanding of the importance of crypto. There is a lot more interest in crypto investments, not just from traditional VCs or crypto VCs, but also from traditional institutions that are now getting into crypto investing because they realize how important this stuff is.”

After working as a software engineer, Qureshi caught the “crypto bug” in 2017, he joked. And within a year, his company launched its first fund with an investment team made up of a handful of ex-techies, from computer scientists to coders, Qureshi said.

“It’s really important to have that technical fundamental knowledge when investing in crypto technology early on,” Qureshi said. “It’s like investing in crypto without a knowledge of technology is like investing in biotech without understanding the biology. You would miss the core mechanics of what you are investing in.”

There is a lot of excitement in the crypto community and among investors around play-to-earn gaming, decentralized autonomous organizations (DAOs) infrastructure and web3 developer tooling, Qureshi said. But Dragonfly will continue to invest in those areas, as well as in decentralized finance, smart contracts, NFTs, the metaverse and other sectors in the crypto ecosystem, he said.

“If you’re a crypto investor, I don’t think it’s your job to pick one sector that you think will be the future,” Qureshi said. “The honest reality is that we don’t know. The future is still unwritten. When people show up and build, they will determine where the future lies [of crypto] goes.”

Overall, 2022 looks set to be another hot year for crypto in terms of capital investment. Last year, according to data from PitchBook, more than $30 billion was raised by crypto firms and about $13 billion was raised in the first four months of 2022.

In addition, late-stage post-money valuations for venture-backed crypto and blockchain companies rose an average of 91% to $3.95 billion, according to a PitchBook report. Average global late-stage VC valuations, meanwhile, fell 14% to $697.6 million.

The growth of the crypto sector is not only affecting investors, but also businesses and institutions, Qureshi noted. †[They] struggling to figure out how to re-equip themselves and begin to understand how this paradigm shift from within the crypto industry will impact what they do and how they run their businesses.”

“It’s really clear that the whole world now realizes how important this industry is,” Qureshi said. “After everything that has happened in the past year, it is no longer a question of whether crypto is going to become a thing.”

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