Exclusive: Crypto venture firm Dragonfly closes $650 million fourth fund—even as blockchain VCs face ‘mass extinction’ |
Exclusive: Crypto venture firm Dragonfly closes $650 million fourth fund—even as blockchain VCs face ‘mass extinction’
When Rob Hadick signed the paperwork to join Dragonfly Capital in April 2022, he rented a house in the Hamptons. A contract with his former employer, the hedge fund GoldenTree, obliged him to refrain from working for six months, so Hadick prepared to lean into forced leisure time in the country. His plans for a relaxed stay soon came undone.
Shortly after his arrival, the crypto market went into a freefall following the implosion of a notorious stablecoin project called Terra Luna. Hadick remembers scrolling through Twitter as the contagion spread. His wife called to ask if he was relaxing. “I don’t think you understand what’s happening to our net worth,” he responded. “I am drinking whiskey in a dark room at 2 p.m. on a Tuesday.”
His exile finally ended in November—right in time for a second crypto calamity in the form of FTX’s collapse. But Hadick never rethought his decision to go all in on crypto. “I was scared about what was happening to the industry,” he recently told Fortune from Dragonfly’s offices near New York City’s Union Square. “But I was excited about the opportunity we had, because we [still] had $500 million to deploy.”
That fund, Dragonfly’s third, ended up catapulting the firm into the upper echelon of the crypto venture world, competing with the likes of Andreessen Horowitz and Paradigm thanks to its prescient bets on now massive startups including Polymarket, Rain, and Ethena. Now, as crypto enters yet another winter, with token prices plummeting and excitement washed out by AI hype, Dragonfly is announcing its fourth fund, a $650 million vehicle.
The crypto venture ecosystem is going through a “mass extinction event,” as Hadick put it, but Dragonfly has thrived despite a founder breakup, a regulatory scare from the Department of Justice, and a pivot away from China amid a crypto crackdown. At the core of Dragonfly’s strategy are its four symbiotic leaders: Hadick, the fintech bridge; Haseeb Qureshi, the ambassador; Tom Schmidt, the DeFi whiz; and Bo Feng, the firm’s mysterious founder and an icon of the Chinese tech scene. “It’s bizarre to see us now become one of the incumbents,” said Qureshi. “We’re playing a bigger game than we were playing in the past.”
Qureshi started playing poker professionally at 16 years old, mostly sticking to online games because he wasn’t allowed in casinos. By the time he was 21, Qureshi had raked in almost $2 million, but he realized that he didn’t want to make the game his life. He made a bet with a friend that if he ever played another hand of professional poker, Qureshi would have to pay him $100,000. “That was my way of sealing off the decision for myself,” he told Fortune.
Qureshi says that his early years at the digital card table prepared him for a pivot into crypto investing. Just as friends told him he was crazy for becoming a teenage poker shark, his decision to join the crypto industry elicited widespread doubt, not least because Qureshi had made a name for himself as a Silicon Valley software engineer. He left a lucrative job at Airbnb to go start a stablecoin startup in 2017, long before stablecoins were all the rage, eventually finding his way to a (then) $500 million venture fund called MetaStable.
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