Galaxy Digital Closes $175 Million Venture Fund for DeFi Startups

Galaxy Digital has successfully closed its first venture fund with outside capital, raising $175 million. This fund is specifically designed to invest in early-stage cryptocurrency startups with a focus on decentralized finance (DeFi). The move underscores Galaxy Digital's commitment to expanding its crypto investment portfolio and supporting innovative projects in the DeFi space.

The $175 million fund is a significant milestone for Galaxy Digital, as it marks the company's first foray into venture capital with external investors. This strategic initiative allows Galaxy Digital to diversify its investment strategy and tap into the burgeoning DeFi market, which has seen substantial growth and innovation in recent years. By investing in early-stage startups, Galaxy Digital aims to identify and support promising projects that have the potential to disrupt traditional financial systems and drive the adoption of blockchain technology.

The fund's focus on DeFi is particularly noteworthy, as this sector has emerged as one of the most dynamic and promising areas within the cryptocurrency ecosystem. DeFi platforms offer a range of financial services, including lending, borrowing, and trading, without the need for traditional intermediaries. This decentralized approach not only enhances financial inclusion but also provides users with greater control over their assets and transactions.

Galaxy Digital's decision to raise a dedicated venture fund for DeFi investments reflects the company's confidence in the long-term potential of this sector. By providing early-stage funding to innovative startups, Galaxy Digital can help accelerate the development and adoption of DeFi technologies, ultimately contributing to the growth of the broader cryptocurrency market. This strategic move positions Galaxy Digital as a key player in the DeFi space, with the resources and expertise to support the next generation of blockchain-based financial services.

The $175 million fund is a testament to Galaxy Digital's commitment to fostering innovation and growth in the cryptocurrency industry. By investing in early-stage DeFi startups, the company aims to drive the development of new financial technologies and services that can challenge traditional financial systems and offer users more efficient, transparent, and inclusive financial solutions. This initiative is expected to have a significant impact on the DeFi ecosystem, as it provides much-needed capital and support to promising projects that are poised to shape the future of finance.

Galaxy Digital had long wanted to scale its venture operation beyond balance sheet investing but saw the right moment post-FTX collapse. The new fund is anchored by Galaxy itself, which holds both general partner and limited partner stakes. The company declined to name other investors but described them as institutional players, including family offices and fund-of-funds linked to Galaxy’s asset management clients.

Galaxy announced a first close of $113 million in July 2024 and has already deployed $50 million, backing companies such as Monad (a performance-focused blockchain) and Ethena (the issuer of a yield-bearing stablecoin).

Founded in 2018 by former Goldman Sachs partner Mike Novogratz, Galaxy has grown into a sprawling crypto conglomerate with exposure to asset management, Bitcoin exchange-traded funds (ETFs), mining and venture investing. In May, the firm was listed on Nasdaq and reported $7 billion in assets under management. However, it suffered a loss of $295 million in the first quarter of 2025 due to falling prices and restructuring in its mining arm.