Dragonfly Buys Hedge Fund Backed by A16z and Sequoia to Expand Web3 Strategy

Leading crypto-focused venture capital firm Dragonfly has acquired MetaStable to accelerate its Web3 strategy.
Image source: Dragonfly/Medium

Quick take:

  • Dragonfly has purchased MetaStable.
  • The crypto-focused venture capital firm is expanding its web3 strategy beyond NFTs, DeFi and gaming projects.
  • MetaStable is a crypto investment firm backed by a16z and Sequoia.

Dragonfly has announced its acquisition of crypto hedge fund MetaStable. The crypto-focused venture capital firm is beefing up its web3 strategy with the purchase. 

MetaStable Capital has over $400 million in assets under management and is backed by leading venture capital firms Sequoia Capital and Andreessen Horowitz (a16z). MetaStable was founded in 2014 and has been one of the best-performing crypto hedge funds in the industry.

Dragonfly’s new acquisition was among the earliest investors in Filecoin, a decentralised storage platform, as well as, the leading blockchain for developer apps, Ethereum. It also invested in the proof-of-stake blockchain platform Algorand.

MetaStable claims to have at one point made its investors a 500% return on investment. Some of the projects MetaStable invested in have benefitted from the rapid adoption of emerging segments of the crypto space. 

Ethereum and Algorand have both onboarded masses to the blockchain through non-fungible tokens (NFTs) and gaming projects.

Dragonfly managing partner Haseeb Qureshi, who previously worked at MetaStable as a partner thinks the firm has since grown to become one of the most expensive crypto hedge funds, according to a post on Dragonfly Research’s Medium page.

The acquisition comes at the back of Dragonfly’s oversubscribed $650 million fundraising for its third crypto fund. The company said in April that it will continue to invest in web3 initiatives including NFTs, smart contracts, the metaverse and tokens, among other verticals.

Last month, the firm invested in XLD Finance, a decentralised finance platform looking to provide cross-border payments in emerging markets. Dragonfly was joined by Digital Currency Group (DCG), Circle, Advance AI, IDG Capital, Insignia Venture Partners and YGG, among others in the $13 million Series A round.

Commenting on the company’s new direction, Qureshi said, Dragonfly is dropping the name Capital, because it wants to be more crypto-centric.

It’s hard to build the future when you look like the past,” wrote Qureshi in the Medium post. “That’s why we’re changing the way Dragonfly looks and feels. We’re dropping the ‘Capital’ from our name, and our new look is more crypto-native, inspired by the hackers and weirdos (we say with love!) who have built this industry from the ground up.”

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