Dragonfly Capital Raises Third Crypto Fund of $650 Million

Crypto venture capitalist Dragonfly Capital said on Wednesday it will launch its biggest fund yet, with a valuation of $650 million (roughly Rs. 4,975 crore). The fund is its third such venture, and is called Dragonfly Fund III. The fund is more than twice the value of the firm's previous two funds, which came up to a combined $300 million (roughly Rs. 2,295 crore). It also mirrors similar moves from other crypto VCs such as Bain Capital and Sequoia Capital, which had both launched funds of nearly $600 million (roughly Rs. 4,595 crore) in value.

Those backing the new fund include Tiger Global, KKR, Sequoia China, Invesco, Top Tier Capital Partners and, Ivy League endowments. The fund was originally aiming for $500 million (roughly Rs. 3,830 crore) in commitments, a regulatory filing shows.

Dragonfly, which is helmed by Haseeb Qureshi, has backed several crypto mainstays, including Avalanche, Bybit, Amber, Dune Analytics and Frax. The new fund was revealed in a blog post by Qureshi, who sees a big jump in crypto and blockchain adoption over the next five years.

"The L1 (layer 1 blockchain network) wars are heating up, the race to build the metaverse is on, decentralised finance (DeFi) is maturing, crypto gaming now seems inevitable, and the financial infrastructure is institutionalising," states Qureshi in his blog.

With the new fund, Dragonfly will also lead late-stage funding rounds, Qureshi said. Interestingly, Qureshi's comments mirror those from other major crypto venture capitalists, who have bet large amounts of money on a crypto explosion in the coming years. The space has seen a boom in popularity this year, given that crypto donations played and continue to play a significant role in the Russia-Ukraine war.

Dragonfly's latest fund also highlights the increasing amount of venture capital funding that has entered crypto over the past two years. A report from the Wall Street Journal shows blockchain and crypto startups raised $9.2 billion (roughly Rs. 70,435 crore) in the first quarter of 2022.