ByCoinGape
Venture Capitalist (VC) firms are coming back to crypto, and Dutch investment firm, Theta Capital Management, has raised $175 million to prove this. Rather than investing directly in blockchain start-ups, the fund focuses on crypto-based venture capital firms. The fund, tagged Theta Blockchain Venture IV, is the fourth in a series that helps crypto-focused VC firms secure the backing they need to invest in blockchain startups.
Theta Capital, founded in 2001, has actively participated in the crypto market since 2018. The Amsterdam-based investment firm currently manages over $1 billion in assets. The new investment fund reflects Theta’s belief that crypto-native VCs, companies with deep roots in crypto, are better equipped to spot early opportunities than generalist investors.
According to Ruud Smets, Theta’s managing partner and chief investment officer, “Their (crypto-native VCs) early advantage and experience have compounded over time, making it hard for generalist VCs to compete in the early stages.”
Rather than investing in crypto start-ups directly, Theta is backing crypto-native VCs like Polychain Capital and CoinFund. These companies have strong roots in crypto.
Theta’s new investment fund notably coincides with the gradual return of venture capitalists to the crypto market. Following a lengthy slump, VC investment is making a steady return, with Q1 2025 figures hitting a remarkable $4.5 billion.
Adding to that, data from PitchBook suggests a notable increase in overall funding, despite a drop in the number of deals. This means fewer blockchain startups are getting funding, unlike in previous years. However, startups that secure backing receive huge financial support.
Additionally, reports show that VCs are more interested in backing startups dealing in crypto infrastructure, asset management, and trading. This trend supports the popular belief that investors are still interested in betting on the core of blockchain and supporting ventures with real-world value.
Venture Capital firms funding helps to fuel innovation, build strong teams, and facilitates product development for mainstream adoption. So, an increase of VC presence in recent months could mean the development of better projects.
Beyond financial support, VC firms offer mentorship and access to networks. Such backing helps startups to scale and navigate regulatory hurdles.
With strong VC backing, projects can invest heavily in crypto education. Moreover, the mentorship support would help these start-ups address common challenges such as complexities. Additionally, VC presence adds credibility to new crypto projects, helping them gain easy mainstream awareness.
Although some crypto startup opt for self-funding, VC funding has been known to accelerate early-stage growth. Theta Capital’s support for crypto-native VC could offer significant returns for the investment firm. The fund bets on experts who can identify early opportunities in the crypto market and guide them towards meaningful growth.
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