Crypto firms still seeing VC money, even amid downturn

Crypto funding might have declined last quarter, but investors behind the largest funds in the space are sticking to their guns.

“There’s always going to be a need for big funds and investors to help the startups get the funding they need,” Lydia Chiu, vice president of business development at Ava Labs, told TechCrunch+. With the current regulatory scrutiny on the space alongside the bearish market sentiment, venture capital funds are needed more than ever, she said.

Ava Labs, the company that deployed the layer-1 blockchain Avalanche, launched a $200 million “Blizzard” investment fund in 2021 dedicated to growing its chain’s ecosystem. Since then, it has been a “very busy time,” Chiu said.

In the past year and a half, the Blizzard fund has invested in about 400 deals across 125 portfolio companies, deploying just over three-quarters of its capital, Chiu said. “We’re still seeing really strong deal flow, and we’re actively investing.”

And it’s not the only one: There are still “quite a bit of crypto venture funds left to be deployed” that were raised a couple of years ago, said Tushar Jain, managing partner at Multicoin Capital. Multicoin launched a $430 million fund in 2022, which has since deployed “under half of the fund” with a “majority” left to invest, he said.

The remainders of just those two funds are worth nine-figures. Given that Q1 2023 crypto fundraising was in the billions, the figure may seem modest, but from just two funds it’s meaningful.

Some newer funds are even bigger.