VC firm Blockchain Capital raises $580 million for crypto gaming, DeFi bets

Crypto-focused Blockchain Capital has raised $580 million across two new funds, one of the biggest raises for the asset class this year and the largest-ever for the venture firm in its 10-year history.

Blockchain Capital, which has an existing $2 billion in assets under management, will use the fresh capital to back crypto startups in areas including decentralized finance and gaming as well as infrastructure, general partner Kinjal Shah said in an interview with Bloomberg News.

One of the funds, which is called Fund VI, is dedicated to new and early-stage companies; the other, the Opportunity Fund, will be used for later-stage investments. 

Blockchain Capital’s investors include Visa and PayPal, as well as the Teacher Retirement System of Texas, which invested in Fund VI. Shah declined to disclose the terms of the raise.

San Francisco-based Blockchain Capital has previously invested in Worldcoin, crypto exchange Kraken and nonfungible token marketplace OpenSea. 

Despite the steep downturn in NFT sales and prices, Shah said that are still opportunities in the category, citing the potential for the tokens to be used to put financial products or real estate contracts on the blockchain.

Shah declined to explain how the $580 million would be split between the two funds, or how much of the new capital would be dedicated to crypto token purchases. She said Blockchain Capital will continue to invest in tokens, despite legal debates over whether cryptocurrencies are considered securities. 

While there are still crypto companies committed to staying in the US, “the regulatory environment is certainly challenging,” Shah said. “I would say that there’s perhaps more than normal sort of interest in moving abroad.”

Startups in the US are having to use multiple banking providers following the collapse of Silicon Valley Bank in March to avoid having all their money in one place, Shah said. Meanwhile, Europe and parts of Asia are becoming hotbeds of crypto innovation, she added.

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