As the world braces for an economic downturn, America’s largest VC firms are amassing unprecedented sums to invest in startups.
Lightspeed raised $ 7.1 billion across four funds this week, underscoring a trend that began in the early weeks of 2022 and has yet to abate.
US VC firms raised $ 121.5 billion in the first six months of 2022, 87% of the record $ 138.9 billion committed in 2021, according to the latest PitchBook-NVCA Venture Monitor. Of this year’s total, $ 77 billion was committed to funds worth $ 1 billion or more — far and away the largest annual total raised by these mega-funds.
At the same time, US VC investors have become pickier with deals and stingier with dollars, which caused dealmaking to fall to $ 62 billion in Q2, the lowest deal value recorded since Q4 2020.
In announcing the funds, Lightspeed unveiled Lightspeed Faction, a team dedicated to blockchain investments. Faction is led by Samuel Harrison, former managing partner of Blockchain Ventures, and Banafsheh Fathieh, the former head of investments at Prosus Ventures.
Other well-established VC firms have made similar efforts to stake out dedicated vehicles and teams in the crypto space. In February, Sequoia allocated up to $ 600 million to invest in liquid tokens and digital assets.
Of the $ 7.1 billion in capital commitments, Lightspeed earmarked $ 1.98 billion for its flagship early-stage fund, $ 2.26 billion for a growth fund to back existing portfolio companies and $ 2.36 billion for an “opportunity fund” to back startups from around the world. It also dedicated $ 500 million to its fourth India-focused fund.
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