Venture capital firm sets up $100 million crypto fund to explore more investment opportunities in the DeFi sector.

The risk investment firm Electric Capital, focusing on cryptocurrency, blockchain, and fintech, announced the successful completion of its second crypto fund's private placement, raising $100 million from numerous undisclosed institutional investors and university endowments. The investment firm will continue its strategy from the first fund, exploring more investment opportunities in the Layer 1 protocols, decentralized markets, and community governance markets.

$100 Million Crypto Fund

Electric Capital is a venture capital firm based in Palo Alto, California. Their first venture capital fund portfolio includes well-known cryptocurrency service providers and blockchain projects such as decentralized exchange (DEX) dYdX, decentralized stablecoin protocol Maker, and digital asset service provider Bitwise.

According to a report, the company announced the completion of their second venture capital fund's private placement on August 4th, raising $100 million from undisclosed institutional investors and university endowment funds. Similar to their first fund, Electric Capital will continue exploring investment opportunities in blockchain Layer 1 protocols, decentralized markets, and markets revolving around community governance. Co-founder of Electric Capital, Avichal Garg, mentioned that the company plans to provide cash checks ranging from $1 million to $6 million to three different startups.

Venture Capital Firms Flocking to DeFi

Since the ICO bubble of 2017-2018, cryptocurrency-focused venture capital firms have become more conservative and cautious towards token sale investments. However, the recent surge in decentralized finance (DeFi) activities this year has once again attracted the attention of venture capitalists. Projects such as decentralized exchanges (DEX), decentralized lending protocols, and decentralized asset management platforms have become market hotspots. According to data from DeFi Pulse, total locked assets in DeFi protocols have surged from $2 billion to over $4 billion in just a few weeks.

As reported earlier, Silicon Valley's renowned venture capital firm Andreessen Horowitz (a16z) established their second crypto fund in April this year, totaling $515 million. The company revealed in their announcement that decentralized finance (DeFi) would be a key investment focus for their second crypto fund, indicating a widespread trend of interest in DeFi within the cryptocurrency investment world.

Avichal Garg mentioned that the timing of completing the second fund coincided with a crucial moment in the cryptocurrency market, presenting numerous opportunities and possibilities to engage with emerging technologies.

In addition, the Huobi exchange also announced the establishment of "Huobi DeFi Labs" on August 3rd, claiming to invest thousands of dollars in researching, incubating, and investing in DeFi.