Jacquelyn Melinek

<div id="highlights-block_620e829c7741a" class="highlights">
 <ul>
 <li>The fifty-year-old company has $80 billion in assets under management</li>
 <li>The firm&#8217;s involvement in crypto started back in 2015 when it began investing in the space through both equity and tokens</li>
 </ul>
 
</div>



Sequoia Capital is launching a new $500 million to $600 million sub-fund focused primarily on liquid tokens and digital assets, a spokesperson confirmed with Blockworks on Thursday.



The capital plans to complement its other crypto investments in seed, venture, growth and expansion funds. It is also one of the first sub-funds to be launched as part of its new Sequoia Capital Fund, an open-ended liquid portfolio, the company said.



The founders have asked the firm to take a more active role in managing its tokens through staking, providing liquidity, participating in governance and trading through portfolio companies’ platforms. This fund will give it the ability to engage further, the company shared.



“Our goal with this fund is to participate more actively in protocols, better support token-only projects, and learn by doing ourselves,” Sequoia Capital’s Michelle Bailhe, Shaun Maguire and Alfred Lin wrote on the Sequoia <a href="https://sequoia.medium.com/a-block-step-forward-14274f4a0e65" target="_blank" rel="noreferrer noopener">blog</a>.



The firm&#8217;s involvement in crypto started back in 2015 when it began investing in the space through both equity and tokens. In 2017, Sequoia invested through its main funds, while in 2021, 20% of its new investments throughout the US and Europe were in crypto.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“We believe that crypto is more than a sector; it’s a fundamental shift that will impact all sectors,” Sequoia noted.&nbsp;</blockquote>



In general, Sequoia Capital invests in a number of sectors aside from crypto, such as technology, financial services, energy and healthcare. The fifty-year-old company has $80 billion in assets under management, according to PitchBook data.



This scale of investment is not uncommon for the firm. Sequoia Capital’s India branch <a href="https://cms.blockworks.co/polygon-closes-450m-raise-led-by-sequoia-india/" target="_blank" rel="noreferrer noopener">led a $450 million</a> private token sale in <a href="https://cms.blockworks.co/?s=polygon" target="_blank" rel="noreferrer noopener">Polygon</a> — a decentralized Ethereum scaling platform — earlier this month. Separately, in January, Sequoia and Paradigm invested <a href="https://cms.blockworks.co/sequoia-and-paradigm-invest-1-15b-in-citadel-securities/" target="_blank" rel="noreferrer noopener">$1.15 billion</a> in Citadel Securities.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/the-breakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha in your inbox. Think like an analyst. </li>
</ul>

Alfred Lin

Sequoia Capital Is Raising up to $600M in New Sub-fund To Focus on Tokens

Ben Strack

<div id="highlights-block_61ddb04071b0c" class="highlights">
 <ul>
 <li>Venture capital firm Sequoia led the round through investments from its Heritage, Global Equities and Global Growth funds</li>
 <li>Crypto-focused investment firm Paradigm will help Citadel expand to more markets and asset classes, including crypto, according to Paradigm co-founder Matt Huang</li>
 </ul>
 
</div>



Venture capital firm <a href="https://www.sequoiacap.com" target="_blank" rel="noreferrer noopener">Sequoia Capital</a> and crypto-focused investment firm <a href="https://www.paradigm.xyz" target="_blank" rel="noreferrer noopener">Paradigm</a> have invested $1.15 billion in market maker <a href="https://www.citadelsecurities.com" target="_blank" rel="noreferrer noopener">Citadel Securities</a> as it looks to ​​further scale its business and expand into new markets.



Based in Chicago, Citadel offers equity and fixed income products to 1,600 clients globally, including central banks, financial institutions, government agencies, corporations, insurers and sovereign wealth funds.



&#8220;As technological innovation in financial markets becomes only more important, we see enormous opportunities to meet the needs of our clients across more markets and more products,” Citadel Securities CEO Peng Zhao said in a statement.



Citadel Securities Chairman Ken Griffin told the Economic Club of Chicago in October that his company does not trade cryptocurrencies because of regulatory uncertainties around them, <a href="https://www.reuters.com/business/citadel-securities-avoids-crypto-due-regulatory-uncertainty-founder-2021-10-04/" target="_blank" rel="noreferrer noopener">Reuters reported</a>.



A Citadel spokesperson did not immediately return Blockworks’ request for comment about how the company could look to get involved in crypto.&nbsp;



Sequoia led the funding round through investments from Sequoia Heritage, Sequoia Capital Global Equities and its Global Growth Fund.



&#8220;Citadel Securities has carved out a unique place in the financial markets through its ability to absorb and price risk using techniques and capabilities from far outside the traditional world of Wall Street,&#8221; Sequoia Partner Alfred Lin said in a statement.&nbsp;



A Sequoia representative did not immediately return Blockworks’ request for comment.&nbsp;



Sequoia has <a href="https://cms.blockworks.co/sequoia-capital-may-be-embracing-crypto/" target="_blank" rel="noreferrer noopener">recently signaled its interest</a> in the crypto space. It changed its Twitter bio last month to say: “Mainnet faucet. We help the daring buidl legendary DAOs from idea to token airdrops. LFG.”  It also recently <a href="https://opensea.io/assets/0x97e5762a9670bb5aa5b47e132a045d6df1c309fe/0" target="_blank" rel="noreferrer noopener">auctioned off</a> its 2005 YouTube memo as a non-fungible token (NFT) on OpenSea for $884,776 worth of ether.



Meanwhile, Paradigm is an investment firm focused on investing in crypto and Web3 companies and protocols. It often invests at early stages and offers additional capital to its portfolio companies over time, according to the firm.



Paradigm <a href="https://cms.blockworks.co/paradigm-launches-2-5-billion-crypto-fund/" target="_blank" rel="noreferrer noopener">announced the launch</a> of a $2.5 billion venture fund in November. The new fund was to operate alongside Paradigm’s existing flagship fund and will “continue investing in the next generation of crypto companies and protocols,” Paradigm co-founders Matt Huang and Fred Ehrsam said at the time.



&#8220;We look forward to partnering with the Citadel Securities team as they extend their technology and expertise to even more markets and asset classes, including crypto,&#8221; Huang said in a statement.&nbsp;



A Paradigm spokesperson declined to comment on the investment in Citadel.



<hr class="wp-block-separator"/>
Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
<hr class="wp-block-separator"/>

Sequoia and Paradigm Invest $1.15B in Citadel Securities

Morgan Chittum

<div id="highlights-block_61b0df11db8ed" class="highlights">
 <ul>
 <li>The fund also auctioned off their 2005 YouTube memo as a NFT for $884,776 worth of ether</li>
 <li>Sequoia reportedly co-led a $100 million investment round for crypto firm LayerZero Labs</li>
 </ul>
 
</div>



“Mainnet faucet. We help the daring buidl legendary DAOs from idea to token airdrops. LFG,”&nbsp; reads the Twitter bio of Sequoia Capital, one of the world’s largest and most successful venture funds.



Although the megafund did not respond to Blockworks’ request for comment by press time, the change is being interpreted by many as an increasing embrace of Web3. “Buidl” is a reference to the infamous “hodl” phrase used by supporters of cryptocurrencies, and DAOs are a reference to “decentralized autonomous organizations.”



<figure class="wp-block-image"><img decoding="async" src="https://lh4.googleusercontent.com/8p6Rv-fFAShlA6wOEEKMCVBMlttKT8ucnHFcrzEW3JJRv0aHC94nkUSA35mcevZ_33dzlbtVjCOdAGfSzX2AYDo2Xf0Fh4DRPzl6PPQKhAUCjIXFqRZZvCbsHOATnlHiLgESCrP5" alt=""/><figcaption>Sequoia&#8217;s Twitter bio on Wednesday, Dec. 8, 2021</figcaption></figure>



Sequoia India followed suit, changing their Twitter account location to “the metaverse” on Tuesday. “Sequoia India helps shadowy super coders across India &amp; Southeast Asia buidl legendary DAOs from discord to metaverse and beyond,” Sequoia India’s bio now says.



The potential rebrand follows reports of the fund co-leading a $100 million investment round in LayerZero Labs, a crypto firm that has yet to launch, The Information first <a href="https://www.theinformation.com/articles/sequoia-capitals-crypto-frenzy-intensifies-with-three-new-deals" target="_blank" rel="noreferrer noopener">reported</a> on Nov. 31, citing two sources familiar with the deal.&nbsp;



Sequoia Capital India may also be in talks to back Polygon, an Ethereum scaling ecosystem, via token purchases worth $50 million to $150 million, <a href="https://techcrunch.com/2021/12/05/vcs-eye-investment-in-polygon/?guccounter=1" target="_blank" rel="noreferrer noopener">according to TechCrunch</a> on Monday, who cited three sources familiar with the matter.&nbsp;&nbsp;



The venture fund <a href="https://opensea.io/assets/0x97e5762a9670bb5aa5b47e132a045d6df1c309fe/0" target="_blank" rel="noreferrer noopener">auctioned off</a> their 2005 YouTube memo as a non-fungible token (NFT) on OpenSea for $884,776 worth of ether on Tuesday.&nbsp;



&#8220;The YouTube Memo NFT is a chance to own a piece of internet history, for a good cause. This 2005 seed stage investment memo is a time capsule from the advent of Web 2.0, so it seemed fitting to auction it at the precipice of Web 3.0,” Sequoia <a href="https://opensea.io/collection/sequoia-capital-archives" target="_blank" rel="noreferrer noopener">wrote</a> of the blockchain-based digital collectible.  



<h3 class="wp-block-heading">Part of a growing trend</h3>



Sequoia isn’t the first fund to potentially embrace crypto (and memes.)&nbsp;



Venture capital firm, Andreesen Horowitz (a16z), filed to become a RIA in March to seek greater flexibility in its investments, particularly crypto. The change allows the 11-year-old firm to now invest in liquid tokens.



Following a16z’s filing, Sam Bankman-Fried’s global cryptocurrency exchange FTX <a href="https://cms.blockworks.co/sam-bankman-frieds-ftx-raises-precisely-420-69m/" target="_blank" rel="noreferrer noopener">announced</a> a Series B-1 funding round of $420 million with 69 investors in October.



<hr class="wp-block-separator">
Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.
<hr class="wp-block-separator">

Sequoia Capital Signals Web3 Embrace with Rebrand and NFT Auction

<div id="highlights-block_61a6e0f282d0f" class="highlights">
 <ul>
 <li>Investors that participated in the round include Tiger Global, Coatue Management, and GL Ventures’ Hillhouse Capital’s VC arm </li>
 <li>This capital raise is the third round of funding for CertiK within the past four months, bringing its total amount raised to over $140 million</li>
 </ul>
 
</div>



Blockchain security firm CertiK has closed an $80 million raise led by Sequoia, bringing its valuation near $1 billion. The funding will be used for the development and operation of more innovative products.



Investors that participated in the round include Tiger Global, Coatue Management, and GL Ventures’ Hillhouse Capital’s VC arm. This capital raise is the third round of funding for CertiK within the past four months, bringing its total amount raised to over $140 million.



“The reason we raised this round was majorly due to rapid growth that we have made in the past year,” Ronghui Gu, CEO and co-founder of CertiK said in an interview with Blockworks. “We have had revenue growth of about 20 times and our team has grown four times, so we are moving really fast,” Gu said.&nbsp;



<div class="wp-block-image"><figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="512" height="345" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/CertiK.jpeg" alt="" class="wp-image-11977" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/CertiK.jpeg?w=512 512w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/CertiK.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/CertiK.jpeg?w=381 381w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/CertiK.jpeg?w=387 387w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/CertiK.jpeg?w=325 325w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/CertiK.jpeg?w=80 80w" sizes="auto, (max-width: 512px) 100vw, 512px" /><figcaption>CertiK co-founders Ronghui Gu (left) and Zhong Shao.</figcaption></figure></div>



The New York-based firm provides <a href="https://www.certik.com/" target="_blank" rel="noreferrer noopener">security</a> products and services to over 1,800 clients, and its monitoring system Skynet has checked more than $4 billion asset transfers, $3 billion transactions and 4 million accounts in the past year, Gu said. 



“Last year, the total assets lost due to software error was about $50 million. This year, so far, we have lost about $130 million, so that number almost tripled in less than a year,” Gu said.&nbsp;



CertiK hopes to develop products such as scammer alerts and token protection — currently, things that are missing from the blockchain security ecosystem, Gu said. “The entire blockchain is about trust but the current system is not trustworthy,” he said. “That’s the challenge we aim to address. How can we bring trust back to the community beyond smart contracts, auditing and how can we provide more security products and one-stop products to help bring the trust back to the community?” he added. 



In 2022, CertiK will focus on non-fungible tokens (NFTs) and the metaverse as demand for those two divisions in the crypto industry has increased in the past year, Gu said.



<hr class="wp-block-separator"/>



Get the day’s top crypto news and insights delivered to your inbox every evening. <a href="https://cms.blockworks.co/newsletter/" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a> now.



<hr class="wp-block-separator"/>

Sequoia

Newsletter

Blockworks Research