Tribe Capital Launches $100 Million Crypto Fund Targeting Layer 1, 2, and DeFi Projects – Bull Market Back?

Venture capital firm, Tribe Capital, has launched a new crypto fund to raise $100 million.

The tribe plans to channel the funds into early-stage layer 1 and 2 ecosystems and DeFi projects.

The San Francisco-based company with $1.6 billion in assets under management will invest $500,000-$3 million in these projects to bring real-world assets on-chain. 

This development comes amid a drastic plunge in venture capital investment value in the crypto and blockchain ecosystem.

Tribe To Support Fund Projects That’ll Drive Mainstream Crypto Adoptions

Tribe Capital had previously backed cryptocurrency firms such as FTX, Kraken, and Bitfinex in 2021 during the bull market.

In May 2021, Kraken added Tribe’s co-founder and partner, Arjun Sethi, to its board. 

At the time, Kraken was eyeing over $20 billion in funding, and Tribe spending $120 million in primary and secondary equity, became its second-largest investor. 

The tribe had invested in FTX before its collapse. And in April 2023, it considered leading a $250 million fundraising to revive the crypto exchange. 

In the latest development, Tribe Captial wants to help bolster growth in DeFi projects and protocols that could provide security, scalability, liquidity, and cross-chain interoperability. 

This initiative will boost user confidence in crypto, thus driving mainstream adoption.

The current fund, dubbed the “Digital Future Fund I,” follows the firm’s previous crypto fundraising in October 2021, when it raised $75 million. 

Unfazed By Plunging VC Funding

This development comes amid declining VC funding in crypto due to the prolonged bear market.

According to reports, VC funding dropped by 91% in January 2022. 

The VC investments in private crypto startups for January were $548 million, a massive decline from the $6 billion recorded in January 2022. 

The number of deals, majorly for smaller early-stage firms, reduced from 166 to 62, according to CoinDesk’s analysis. 

This year’s decline in crypto VC investment could be due to a spillover of last year’s crypto winter.

According to the Blockdata report, there was a 34% decline in venture capital funding value from Q3 2022. 

Q4 of 2022 recorded a drastic drop compared to Q1 and Q2. Q4’s funding value dropped by 67% from Q1 and 53% from Q2, 2022.

The FTX collapse and the global macroeconomic conditions in the capital markets due to rising interest rates escalated the issue. 

Despite the bearish situation and the dwindling VC interest, Tribe Capital appears unfazed. 

Notably, the locked investment portfolio on the defunct FTX exchange did not stop Tribe Captial from seeking to invest in crypto.

Instead, it is thinking of leading another $250 million fundraiser to revive the bankrupt crypto exchange. 

The latest funding plans confirm Tribe’s bullish sentiment and determination to support crypto development.