In a market characterized by cautious venture capital deployment, Theta Capital Management is pursuing an ambitious $200 million fundraise for its latest blockchain-focused fund-of-funds. This initiative underscores the firm’s conviction in identifying and capitalizing on early-stage digital asset opportunities, even as broader venture funding in the cryptocurrency sector remains subdued. The strategy aims to leverage specialized expertise within a select group of venture firms to generate significant returns.
Theta Blockchain Ventures V
Theta Blockchain Ventures V, the new investment vehicle, is designed to allocate capital to between 10 and 15 venture capital firms that possess deep specialization in digital assets. The firm has set a target net internal rate of return (IRR) of 25% for this fund. This marks the continuation of Theta Capital’s established “Blockchain Venture” series, building on the performance of its predecessors.
The Amsterdam-based firm, founded in 2001 and having pivoted to digital assets in 2018, currently manages approximately $1.2 billion in assets. Its previous five funds within the Blockchain Venture series reportedly delivered a net IRR of 32.7% between January 2018 and December 2024. The firm’s portfolio has included notable crypto venture capital firms such as Pantera Capital, CoinFund, Polychain Capital, and Dragonfly. This latest fundraising effort follows a $175 million round closed in May, dedicated to similar fund-of-funds initiatives.
Strategic Rationale and Market Challenges
The strategic rationale behind Theta Capital’s approach, as articulated by Managing Partner and Chief Investment Officer Ruud Smets, is rooted in the belief that venture capital, particularly at the early funding stages, is the optimal asset class for capturing long-term upside in the crypto sector. The firm prioritizes specialist managers, positing that their concentrated expertise provides a sustainable competitive edge over generalist investors. Smets emphasizes that the growing experience and established market positions of dedicated crypto VCs have created significant barriers to entry for less focused investors.
Despite Theta Capital’s proactive fundraising, the broader landscape for crypto venture investing has presented considerable challenges. Data from Galaxy Digital indicates that in the second quarter of 2025, only $1.7 billion was deployed across 21 crypto-focused venture funds, a figure considerably lower than levels observed during previous bull markets. While VC investment saw a 54% year-over-year increase to $4.8 billion in the first quarter of 2025, PitchBook reported $6 billion in VC funding for the same period, albeit with a 39.5% decline in deal volume. PitchBook also observed a trend where capital is increasingly directed towards trading, asset management, and crypto financial services, which attracted $2.55 billion across 16 deals in Q1 2025, while infrastructure and development firms secured around $955 million over 30 deals.
Market analysts suggest that macroeconomic uncertainty continues to be a factor, yet capital is still being allocated to what are perceived as core utility areas within the crypto ecosystem. Furthermore, an increased institutional focus on artificial intelligence may have diverted some attention and capital away from cryptocurrency investments, particularly as other institutional investment avenues, such as spot ETFs and treasury companies, compete for market share.
Inaugural Conference
In parallel with its investment activities, Theta Capital is also hosting its inaugural “Legends4Legends” blockchain conference on October 16th in Amsterdam. This event is geared towards institutional allocators and aims to provide insights from leading experts in the blockchain industry. The conference will also serve as a charity fundraiser for Alternatives4Children. Discussions are expected to cover the evolving blockchain landscape, including the growth of native financial infrastructure, the role of stablecoins in global digital payments, and the intersection of artificial intelligence and cryptocurrency.
Chris brings over six years of hands-on experience in cryptocurrency, bitcoin, business, and finance journalism. He’s known for clear, accurate reporting and insightful analysis that helps readers stay informed in fast-moving markets. When he’s off the clock, Chris enjoys researching emerging blockchain projects and mentoring new writers.