Dragonfly Capital Looks to Boost Position in Web3 with $650M Third Fund

Dragonfly is beefing up its investment in blockchain and crypto projects after launching an oversubscribed $650M crypto fund backed by Tiger Global, KKR and others.
Image source: dcp.capital

Quick take:

  • Crypto-centred venture capital firm Dragonfly has launched a $650 million crypto fund.
  • The latest fundraising was backed by Tiger Global, KKR, Sequoia China, Ivy League endowments, and Invesco, among others.
  • Dragonfly plans to continue investing in smart contracts, NFTs, and the metaverse, among areas of decentralised finance.

Crypto-centred venture capital firm Dragonfly Capital has closed a $650 million crypto fund backed by Tiger Global, KKR, Sequoia China, Ivy League endowments, and Invesco, among others. 

The firm’s managing partner Haseeb Qureshi said Dragonfly will continue to invest in decentralised finance (DeFi) projects, as well as, smart contracts, NFTs, and the metaverse, among others.

According to a January filing submitted to the US Securities and Exchange Commission, Dragonfly planned to raise $500 million, implying the fundraise was oversubscribed by 30%. The latest fund follows the previous two funds— $100 million launched in 2018 and another $225 million in 2021.

While the venture capital firm will be focusing on the Web3 space covering blockchain and crypto-native companies, protocols, and tokens, it will be investing across all stages including, pre-seed, seed and follow-on rounds.

“We see more opportunities across the different stages and through the lifecycle of a company or protocol,” Qureshi said. “Also, the market has also grown so much. When we first started investing, the entire market for crypto was a few hundreds of billions and now it’s in the multitrillions.”

The VC partner highlighted the level of adoption of crypto in the industry as a signal that there is “a lot of understanding of the importance of crypto,” compared to the time when Dragonfly launched its previous two funds.

“There’s a lot more interest in crypto investments not just from traditional VCs or crypto VCs, but also traditional institutions that are now getting into crypto investments because they realize how important this stuff is,” Qureshi told TechCrunch.

Dragonfly’s third crypto fund is one of the largest to be announced this year. Recently, blockchain VC firm Gumi Cryptos launched a $110 million crypto fund to invest in gaming and the metaverse, while Framework Ventures announced its own $400 million crypto fund, dedicating $200 million to blockchain gaming.

Former Polygon VC partner Tekin Salimi launched a $125 million fund to invest in gaming, NFTs and DAOs, while Ubisoft-backed White Star Capital recently announced a $120 million fund.

In a report by DappRadar, blockchain gaming and NFTs attracted approximately $2.2 billion in venture capital investments during the first quarter of 2022.

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