Today Dragonfly Capital, the cryptocurrency venture fund, said it has raised a third $650 million fund, including from KKR, Invesco, and Tiger Global. Other investors include Sequoia China, Ivy League endowments, Top Tier Capital Partners, and a Southeast Asian state-owned investment company.
The firm’s managing partner is Haseeb Qureshi, one of the thought leaders in the sector. Previous funds have invested in what are now leading players in the industry, particularly in decentralized finance (DeFi) such as Compound and Maker.
However, it has invested across a wide range of sub sectors such as exchanges (Bybit, 1nch), custody (Anchorage), layer one blockchain protocols such as Avalanche and Near as well as numerous tools companies.
Major incumbent investors continue to dive into the sector, and this is not KKR’s first cryptocurrency investment. It recently led the funding round for custody bank Anchorage Digital. Last year Invesco launched blockchain-related ETFs.
“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,” said Qureshi.
BlackRock didn’t invest in Dragonfly but has also dived into digital assets. It recently participated in funding cryptocurrency and derivatives exchange FTX and invested in Circle, the company behind the USDC stablecoin, which has a market capitalization of more than $50 billion. It’s interested in USDC potentially for the settlement of securities.