Theta Capital Closes $175M Raise to Back Crypto-Specialist VC Firms Through Its Latest Fund-of-Funds

Theta Capital Management has pulled in over $175 million for a new fund-of-funds designed to help institutional investors get exposure to early-stage blockchain startups

In a move to support emerging blockchain technology, Dutch investment firm Theta Capital has completed a $175 million fundraising round for its latest fund-of-funds, aiming to connect institutional investors with early-stage crypto startups.

Through its new fund, dubbed Theta Blockchain Ventures IV, the firm will be investing in venture capital firms that are specialized in crypto, according to a report by Bloomberg, citing managing partner and chief investment officer Ruud Smets.

Founded in 2001, the Netherlands-based firm began focusing on cryptocurrencies in 2018 and now manages around $1.2 billion in assets.

Previously, Theta Capital has backed firms like Coinfund, Polychain Capital, and Castle Island Ventures. However, details on how Theta plans to allocate the newly raised capital are yet to be disclosed.

The firm’s latest fund comes amid signs of recovery in crypto venture capital activity. According to a recent report by PitchBook, VC deal value in Q1 2024 rose to $6 billion, more than double the $2.6 billion seen a year ago. However, the number of deals fell to 405 from 670 over the same period.

PitchBook’s senior crypto analyst Robert Le said the $1.4 billion Bybit theft, which he described as the first and only “10-digit hack in history,” served as a stark reminder of the operational risks still present in the industry.

He suggested the incident could drive greater institutional demand for real-time proof-of-reserve tools, improved custody systems, and middleware that simplifies key management. Startups working on these areas might also find a more favorable funding environment, even amid a broader reset in valuations, Le added.

Despite Bitcoin hitting a record high of $100,000 in Q4 2024, venture capital activity in crypto startups remained flat, with VC deal size down nearly 90% since 2018.