Metalayer Ventures, a crypto-focused venture capital firm led by former executives from Chainlink and Two Sigma, has launched a $25 million fund to invest in early-stage blockchain projects with a focus on stablecoins, tokenization and cryptocurrency infrastructure.
Metalayer’s fund has already backed seven companies, the company disclosed to Cointelegraph on May 28. These include AnchorZero, a platform helping crypto founders use Roth IRAs for tax advantages, and Spark Capital, a new venture focused on stablecoin infrastructure.
Other portfolio companies include Ethena, ClearToken, Crossover Markets, Station70 and Theo — an onchain trading infrastructure project that recently raised $20 million from 17 different VC firms.
The company plans to eventually back up to 30 companies with early-stage rounds ranging from $500,000 to $1 million.
Metalayer was co-founded by Chainlink Labs’ former head of growth, Mickey Graham, and former Two Sigma executives Andy Kangpan and David Winton.
Winton developed a proprietary data platform called Moirai to help Metalayer analyze developer activity, protocol engagement and blockchain transaction patterns to uncover promising projects.
“Moirai is our internal sourcing engine for identifying early-stage crypto startups,” Graham told Cointelegraph in a written statement. “The platform is designed to help us systematically surface high-quality startups, and it evaluates opportunities across several key dimensions,” he said.
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Crypto VC deals on the rise, but there’s a catch
Crypto venture capital activity saw a notable uptick in the first quarter, with increases in both total funding and deal volume, according to data from Galaxy Digital.
VC funding reached $4.9 billion during the quarter, though nearly half came from a single deal — Binance, which raised $2 billion from MGX, an investment firm backed by a United Arab Emirates sovereign wealth fund.
Despite the outsized impact of the Binance deal, overall market activity showed signs of improving. A total of 446 crypto funding deals were recorded in Q1, marking a 7% increase from the previous quarter.
Nevertheless, venture capital investors remain cautious about making fresh commitments to the sector, according to Robert Lee, a senior analyst at PitchBook. The first quarter was a challenging market environment as a sharp correction in crypto prices compounded investor reluctance.
In an interview with Bloomberg last month, Lee noted that many venture capital firms are still on the sidelines.
“[M]any of the funds from the last cycle have yet to deliver meaningful DPI,” he said, referring to the private equity metric Distributed to Paid-In Capital, which measures how much capital has been returned to investors relative to what they invested.
Metalayer’s Mickey Graham believes that at least some of this drop-off is due to a much-needed transition happening beneath the surface:
“We believe the crypto industry has crossed the chasm from an early market defined by infrastructure-building to a mainstream technology sector characterized by the deployment of blockchain technology throughout the global economy.”
Although VC activity remains subdued compared to past bull cycles, Kadan Stadelmann, the chief technology officer of the Komodo Platform, told Cointelegraph that the industry has seen an “uptick in mergers and acquisitions, suggesting market maturation.”
Stadelmann indicated that pro-crypto regulations in the United States and European Union, “have given large institutions confidence to continue making investments into crypto firms.”
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