Some VCs are turning away from crypto, but CoinFund is diving deeper with latest $158M fund

As other venture capitalists veer away from the crypto world in hopes of finding other promising startups, CoinFund is doubling down on its investment into the world of web3 with a new $158 million fund.

The oversubscribed pool of capital, or CoinFund Seed IV Fund, initially had a target fundraising goal of $125 million and is backed by institutional investors, family offices and high net worth individuals, the firm shared on Tuesday. By comparison, this fund is 90.4% larger than its third seed fund of $83 million.

It will support pre-seed and seed stage web3 investments, which are still popping up and raising capital in the crypto ecosystem, even amid an ongoing bear market.

The firm was founded in 2015 and has around 105 investments across six investment vehicles. In the last 18 months, it raised over $550 million across venture and liquid investment strategies. In 2022, it launched a $320 million venture fund for early-stage web3 rounds. “This is a subset of preparing for the next leg of growth,” Alex Felix, co-founder and CIO at CoinFund, told TechCrunch+.

Capital trickled into the crypto sector in the second quarter of 2023, falling for a fifth consecutive quarter to $2.34 billion, according to PitchBook data. The decrease could be attributed to VC firms allocating less capital to preserve their funds; regulatory headwinds in the U.S.; lower valuations and smaller rounds resulting in smaller checks; and some firms abandoning the crypto ecosystem in hopes of finding other promising investments.

“[It’s] certainly true that later-stage folks have pulled way back and crossover funds have pulled way back,” Felix said. “We’ve certainly seen other peers distracted with other things. Whether it’s cleaning up from portfolio companies caught up in X,Y or Z in the past year or two or those focused on fundraising to get next vintages set up.”