Sequoia and A16z Backs Dragonfly in the Acquisition of Metastable

Crypto-inclined venture capital firm, Dragonfly has acquired one of Ethereum’s first investors Metastable. The terms of the deal are yet to be disclosed but it is known that Sequoia Capital and Andreessen Horowitz (a16z) backed the acquisition. 

Along with the acquisition of the San-Francisco-based crypto hedge fund, a rebranding was also announced by Dragonfly. The global crypto investment firm has removed the term ‘Capital’ from its name and will only be addressed as Dragonfly. Also, the aesthetic of the crypto platform has been redesigned to be more appealing in the ‘crypto way.’

Metastable Capital was established in 2014 by Naval Ravikant and is one of the oldest and highest-performing crypto hedge funds in the history of digital currencies. Apart from ETH, Metastable is also an early investor in Avalanche, Cosmos, Starkware, NEAR, Zcash, Filecoin, Dfinity, and Algorand. As of July 31st, the ETH investor had over $400 million in assets under management (AUM). 

Metastable Joins Dragonfly While Galaxy Digital Pulls Out of BitGo Acquisition

Altogether, the Dragonfly ecosystem encompasses Dragonfly Ventures, Dragonfly Liquid which was launched about a month ago, and now Metastable which it has acquired. 

Accordingly, Dragonfly has entered into an expansive phase and intends to keep going in that direction. Haseeb Qureshi, a partner at former Metastable which is now Dragonfly concurred with this expansion talk, he affirmed that Dragonfly is “more expansive than it’s ever been.”

Currently, the Metastable website is no longer available to users and investors alike.

While crypto firms like Dragonfly are entering into more mergers and acquisitions, others are refraining. Galaxy BitGo had earlier pulled out on its initial decision to acquire BitGo, an institutional digital asset company. According to Galaxy Digital, the decision to pull out was due to BitGo’s “failure to deliver, by July 31, 2022, audited financial statements for 2021 that comply with the requirements of our agreement.”

As compensation for contract reversal and damages, BitGo has requested that Galaxy pay the already stipulated reversal fee of $100 million or a little more than that. Strongly disagreeing, Galaxy has refused to pay any contract termination or contract reversal fee, and we may be seeing a legal battle ensue in the near term.