Dragonfly’s latest crypto fund will focus on early-stage ventures within the cryptocurrency sector. The firm’s portfolio includes over 100 digital asset startups.
San Francisco-based venture capital firm Dragonfly Capital is aggressively moving to raise $500 million for its fourth crypto fund, according to a Sept. 17 Bloomberg report citing an inside source.
The firm has already raised $250 million, hitting the halfway point toward its goal. Dragonfly is confident that the fundraising will be complete by the first quarter of 2025. This new fund will focus on early-stage investments in crypto and blockchain-based projects. With over 100 digital asset companies and projects already in its portfolio, including Ethena, Andrena, Cosmos, and Monad Labs, Dragonfly is a major player in the space. The firm previously closed its third fund in 2022, worth $650 million.
Dragonfly’s take on Ethereum
In an interview with Cointelegraph, Dragonfly partner Anirudh Pai highlighted the firm’s strong belief in Ethereum, pointing to layer-2 scaling and liquidity fragmentation as critical opportunities in the space.
“Caldera, one of our portfolio companies, is tackling the liquidity fragmentation issue on Ethereum head-on,” Pai said. “Their upcoming Metalayer will integrate the fragmented rollup ecosystems on Ethereum, a game-changer for the platform.”
Dragonfly is also backing MegaETH, a project aiming to revolutionize Ethereum’s transaction speed. The firm participated in MegaETH’s $20 million seed round alongside Ethereum founder Vitalik Buterin and Consensys founder Joseph Lubin. MegaETH’s smart contract platform promises to process 100,000 transactions per second — a staggering 100 times faster than Ethereum’s current capabilities.
VCs are making a comeback
Dragonfly’s latest fund is part of a wider resurgence in venture capital activity within the crypto sector, spurred by the U.S. approval of Bitcoin exchange-traded funds (ETFs) in January.
Pantera Capital, for instance, is seeking to raise $1 billion for its new “all-in-one” fund, Pantera Fund V, which will target a broad range of blockchain-based assets. This marks one of the largest fundraising efforts in the space. Meanwhile, Paradigm has raised $850 million for its third fund, which will focus on early-stage blockchain investments. This represents Paradigm’s largest capital raise since its $2.5 billion fund in 2021. The firm’s portfolio includes big names like Coinbase, Uniswap, and Optimism.
Venture capital funding for crypto startups surged by 2.5% in Q2 2024, signaling a strong return of investor confidence in the space.