Theta's $200M Blockchain Fund Seeks 25% IRR Amid Market and Regulatory Challenges

Theta Capital Management, an Amsterdam-based investment firm specializing in digital assets, has launched its fifth blockchain-focused fund, Theta Blockchain Ventures V, targeting $200 million in capital commitments. The fund aims to invest in 10 to 15 venture capital (VC) firms specializing in digital assets, with a target net internal rate of return (IRR) of 25%. This initiative underscores Theta’s continued focus on blockchain innovation and aligns with the firm’s broader strategy to capitalize on early-stage opportunities in the sector title1^[1]title6^[6].

The fund’s structure reflects a “fund-of-funds” approach, wherein Theta will allocate capital to specialized crypto-native VC firms rather than directly investing in individual startups. This model leverages the expertise of established venture capital managers, including Pantera Capital, Polychain Capital, and CoinFund—firms that have historically delivered strong returns in the blockchain space. Theta, which manages approximately $1.2 billion in assets, has previously demonstrated success in this strategy, achieving a 32.7% net IRR across its prior four blockchain-focused funds from 2018 to 2024 title6^[6]title7^[7].

The timing of the fund’s launch coincides with a mixed landscape for blockchain venture capital. While venture capital investment in the sector has been subdued in 2025, with only $1.7 billion allocated to 21 crypto-focused funds in Q2 2025, demand for institutional-grade opportunities remains. Galaxy Digital noted that competition from artificial intelligence (AI) and spot ETFs has diverted some capital away from crypto investing. However, Theta’s focus on early-stage innovation positions it to capture value as the sector matures title6^[6]title4^[4].

Theta’s approach also highlights the growing institutional confidence in blockchain technology. The firm’s prior funds have supported key players in the crypto ecosystem, contributing to the development of decentralized finance (DeFi), blockchain infrastructure, and digital asset protocols. By targeting a 25% net IRR, Theta aims to align with the high-growth potential of the sector while mitigating risks through diversified allocations across multiple VC managers title1^[1]title7^[7].

Challenges persist, however, including regulatory uncertainty and market volatility. The fund’s success will depend on its ability to navigate these dynamics while identifying VC managers with proven track records. Theta’s managing partner, Ruud Smets, emphasized the importance of specialization, noting that crypto-focused VCs now hold a significant edge over generalist investors in early-stage funding rounds .

The launch of Theta Blockchain Ventures V follows the firm’s recent $175 million raise for its predecessor fund, Theta Blockchain Ventures IV, which closed in 2025. This momentum reflects broader trends in the sector, with venture capital investment in blockchain rising 54% year-over-year to $4.8 billion in Q1 2025. Despite a decline in the number of deals, the total capital raised has more than doubled compared to Q1 2024, signaling renewed optimism among investors .

By targeting $200 million for Theta Blockchain Ventures V, the firm aims to further solidify its role as a key player in the blockchain investment ecosystem. The fund’s focus on specialized VC managers and its alignment with institutional-grade returns position it to capitalize on the sector’s long-term potential, even amid current market headwinds title1^[1]title6^[6].