Even as cryptocurrency companies line up to go public, venture capital firms backing blockchain startups are struggling to raise cash amid a broader funding drought. One exception is Chicago-based CMT Digital, which has managed to secure significant amounts of new capital, investment partner Sam Hallene said. wealth.
The digital asset-focused venture capital firm has raised $136 million for its fourth venture fund, he said. The fundraising event, which concluded in early October, attracted a number of family offices, high net worth individuals and some large institutions. Hallene declined to name specific contributors.
In June 2024, he Tell wealth His firm plans to raise $150 million for its fourth fund. The amount ultimately raised from limited partners (LPs) was lower than originally targeted, but Hallene said CMT Digital was able to largely overcome tough macroeconomic trends affecting venture capital.
“It’s a difficult environment, but we have the trust of our limited partners (existing and new limited partners),” he said.
Circles, Shapes and Consensys
Funding by venture capital firms is set for another year of decline. Venture capital raised just $50 billion in the first half of the year, according to data, putting the industry on track for its worst performance since at least 2015 brochure. Analysts have tip High interest rates and the IPO drought, which has only recently eased, are two of the main reasons for the decline in venture capital allocations.
Despite cryptocurrency prices reaching all-time highs, a difficult fundraising environment has filtered into the cryptocurrency space. Bitcoin and Ethereum. According to statistics, crypto venture capital firms invested nearly $7 billion in startups in the first half of this year brochure. While this puts the industry on track to surpass its most recent annual total, it’s a far cry from the last crypto boom, when investors invested more than $30 billion in both 2021 and 2022.
CMT Digital is no stranger to the ups and downs of cryptocurrency. Hallene said the firm is an offshoot of Chicago-based quantitative trading firm CMT Group. CMT Group is a quantitative trading company founded in 1997. Hallene said the company launched its digital assets division in the mid-2010s, which has since become CMT Group’s largest vertical.
The company has backed some of the biggest names in cryptocurrency, including stablecoin giant Circle, blockchain-based lender Figure and ethereum developer Consensys. Recent IPOs from Circle and Figure have reportedly performed better than expected, and Consensys has hired bankers for its planned IPO Axios.
CMT Digital has allocated about 25% of its $136 million in reserves, which includes investments in the popular stablecoin space and bets on startups currency flow and code” Companies that aim to replace traditional financial institutions will continue to be part of venture capital investment strategies, but Hallene stressed that CMT Digital is open to it.
“I hope we’ll see one or two new categories emerge and have a very compelling case for them,” he said. “When the year is over, we’ll be seen as one of the earliest backers of that new category.”