Dragonfly's $650 million new fundraising and investment story: "Bear markets are our fundraising season."

Written by: Leo Schwartz , Fortune Magazine

Compiled by: Yangz, Techub News

When Rob Hadick signed the papers to join Dragonfly Capital in April 2022, he was still renting an apartment in the Hamptons. Due to a non-compete agreement with his former employer, the hedge fund GoldenTree, he was prohibited from engaging in similar work for six months. Hadick had hoped to enjoy this mandatory leave of absence, but his leisurely vacation plans were quickly thwarted.

Shortly after he joined, the infamous stablecoin project Terra Luna collapsed, triggering a cryptocurrency market crash. Hadick recalls that as the crisis unfolded, he was constantly scrolling through Twitter. His wife called to ask if he was relaxing. He replied, "You probably don't understand what our net worth is going through," adding, "Tuesday afternoon at two o'clock, I was sitting in my little room drinking whiskey."

Even worse, just as his "exile" was ending in November, he was hit by a second crypto catastrophe: the collapse of FTX. But Hadick has never regretted his decision to fully commit to the crypto industry. "What was happening in the industry at the time terrified me," he recently told Fortune magazine from Dragonfly's office near Union Square in New York. "But I was excited about the opportunities we had because we still had $500 million to invest."

It was this third fund that propelled Dragonfly into the top tier of crypto venture capital, placing it alongside firms like Andreessen Horowitz and Paradigm. This was thanks to their accurate bets on now-thriving startups such as Polymarket, Rain, and Ethena. Now, with token prices plummeting and market enthusiasm dampened by the AI ​​hype, plunging the cryptocurrency market into another winter, Dragonfly has announced the launch of its fourth fund, totaling $650 million.

As Hadick put it, the crypto venture capital ecosystem is undergoing a "mass extinction event," but Dragonfly has withstood the challenges of a founder split, regulatory panic from the US Department of Justice, and its withdrawal from the Chinese market amidst China's crackdown on cryptocurrencies, and has instead thrived. At the heart of Dragonfly's strategy are its four complementary leaders: Hadick, with his fintech background, acts as a bridge; Haseeb Qureshi is the brand ambassador; DeFi prodigy Tom Schmidt; and the company's enigmatic founder, Feng Bo, a landmark figure in the Chinese tech world. "It's amazing to see ourselves becoming one of the veteran players now," Qureshi said. "We're playing a bigger game than ever before."

Origin Story

Qureshi started playing professional poker at 16, but because he couldn't get into casinos, he mainly played online. By the age of 21, Qureshi had earned nearly $2 million, but he realized he didn't want to make a living playing poker. He made a bet with a friend: if he played one more hand of professional poker, he would pay his friend $100,000. "That's how I completely cut off that idea," he told Fortune magazine.

Qureshi stated that his early experience playing online poker prepared him for his later shift to crypto investing. Just as his friends once said he was crazy to become a professional poker player at such a young age, his decision to enter the crypto industry also sparked widespread skepticism, especially since Qureshi had already made a name for himself as a software engineer in Silicon Valley. In 2017, he quit his high-paying job at Airbnb to found a stablecoin startup—long before stablecoins became popular—and later joined MetaStable, a venture capital fund with a size of $500 million at the time.

Today, Qureshi is arguably Dragonfly's public face, thanks to his appearances on the popular podcast Chopping Block (the crypto industry's version of All-In) and his trending posts on Crypto Twitter about Web3 game failures or the effectiveness of blockchain project launches. However, Qureshi didn't join Dragonfly from its inception; he joined in 2019, when the crypto industry was mired in a prolonged cyclical downturn.

The early Dragonfly was very different from what it is today. The company was originally founded by Alex Pack and Feng Bo. Pack was a young venture capitalist at Bain Capital Ventures, specializing in cryptocurrency trading; while Feng Bo was a prominent figure in China's booming internet ecosystem and one of the top investors.

Through his fund Ceyuan Ventures, Feng Bo invested in the cryptocurrency exchange OKEx (later renamed OKX), which was the world's largest exchange in 2018. He partnered with Pack to simultaneously invest in both the US and Asia. According to an earlier article in Bitcoin Magazine, Dragonfly's first $100 million fund was backed by some of the most prominent names in Asian tech, including Neil Shen of Sequoia China. (Besides acting as a bridge connecting the region's financial giants, Qureshi described Feng Bo as a "master of interpersonal relationships," despite his low-profile public persona.)

Dragonfly built its reputation by investing in crypto companies like Bybit and Matrixport, and by investing in other crypto venture capital firms through a fund of funds. According to Qureshi, he joined on three conditions: ceasing fund of funds investments, taking more lead in trading, and building a technical team. "Feng Bo basically agreed to all of them," Qureshi said. "In his words, he threw me the car keys…that's how the modern Dragonfly was born." One of Qureshi's early moves was recruiting Schmidt, then head of product at the decentralized exchange 0x, as a junior investor. (Schmidt quickly rose to managing partner.)

Later, Alex Pack left Dragonfly to found another venture capital firm, Hack VC. His breakup with Dragonfly is considered a legendary story in the crypto venture capital world, though Qureshi downplayed the drama. "Ultimately, we had completely different visions for Dragonfly's second fund and its future direction," he said. Pack told Fortune that his first fund with Feng Bo was "very successful," but he realized there were "significant cultural differences" between them. "I spent a few months helping recruit and train my successor, and then we parted ways," he said. Similarly, Schmidt used more vivid language to describe Pack, attributing the split to personality clashes.

By the time Pack left in 2020, Dragonfly faced even bigger problems. Much of this was due to Feng Bo, whose back-office team was based in Beijing. But the Chinese government's crackdown on cryptocurrencies forced Dragonfly to move its Asian operations to Singapore. According to Schmidt, Dragonfly still has a strong presence in Asia, despite reduced investment there in recent years. Schmidt, who speaks Mandarin and interned at a Chinese company during university instead of accepting an early offer from Coinbase, said, "You see a lot of these public chains and DEXs have a user base, and it's clearly predominantly in Asia." He told Fortune, "But in terms of new investment opportunities, there definitely aren't as many as before."

Despite this, Dragonfly's influence in the US crypto community grew steadily. At the time, larger players were raising massive funds, such as Paradigm and Haun Ventures, each with funds exceeding $1 billion. In comparison, Dragonfly's second fund, completed at the end of 2020, was only $225 million, appearing relatively low-key. But Dragonfly still made some winning bets, such as Layer1 Avalanche, financial services company Amber Group, and the controversial privacy protocol Tornado Cash. The latter made Dragonfly national headlines in 2025 when prosecutors inadvertently revealed in court that Schmidt could face criminal charges related to this investment in a larger money laundering case. (Later, the Department of Justice quickly reversed its stance, which actually earned the company a badge of honor among crypto enthusiasts, although Qureshi stated that the investment was never ideological.)

However, at a time when FTX was facing a life-or-death crisis, Hadick's arrival propelled Dragonfly to new heights and laid the foundation for the company's current status.

New Era

During the 2021 crypto bull run, entrepreneurs unveiled grand plans to reshape the internet with decentralized infrastructure, including potential alternatives to platforms like Twitter and Spotify. For crypto investors, these plans revolved around so-called token mechanisms, where venture capital firms acquired ownership of proprietary cryptocurrencies rather than traditional equity.

However, this vision of the Web3 future never truly materialized. Even before the FTX collapse, the crypto industry was racing in one direction: Wall Street. Bitcoin began as a form of electronic cash, and then Ethereum built the next layer, allowing developers to write decentralized finance applications for lending and trading. But investors like Hadick from traditional finance believed that crypto would soon consume all the functions of banks and brokerage firms. "We knew that at this point, we needed someone who knew more than we did," Qureshi said. "Rob was the person we all saw as capable, resourceful, and experienced enough to take on this role."

After Hadick joined, Dragonfly began investing in companies that are now defining the crypto landscape. One of them, Ethena, was building a synthetic dollar that generated returns through a complex, hedge fund-like strategy in the background. Although Ethena later became one of the most prominent projects in the crowded stablecoin space, most people thought it was "crazy" when founder Guy Young pitched the idea to investors. Young recalls that these skeptics brought up the crash of Terra Luna, which nearly crippled the entire crypto industry, saying, "This just happened, and you're bringing this up? That's ridiculous."

It was midway through the 2023 bear market, but Dragonfly seized the opportunity. "They were able to look at it from a first-principles perspective," Young said. Dragonfly led Ethena's $6 million seed round. Just over a year earlier, Ethena had completed a $100 million funding round with investors including Franklin Templeton and Fidelity's venture capital arm. Today, its flagship stablecoin has a market capitalization of approximately $6.3 billion.

The following year, Dragonfly invested in Polymarket's Series B funding round, having almost done so a few years earlier. According to Qureshi, Dragonfly nearly became Polymarket's first investor during its seed round in 2020, after most of the VCs Shayne Coplan approached rejected him. "We really liked it," Qureshi said, even though prediction markets hadn't yet proven successful at the time. Ultimately, Polychain offered better terms, and Dragonfly decided not to follow suit. "That was clearly a big mistake on our part, but our thinking was right," Qureshi said.

Others in the crypto industry have eventually come to agree that the most successful digital asset companies won't be blockchain mobile games, but rather relatively mundane financial products like credit cards and money market funds. Even Chris Dixon, a partner at a16z who championed the "read-write-own" Web3 concept, recently posted on X, stating that we are now in the "financial age of blockchain."

“This is the biggest meta-shift I’ve seen in the industry,” Schmidt said. He added that investors are realizing there will be fewer native tokens for different crypto protocols and more tokens representing real-world assets such as stocks and private credit funds. “Right now, a lot of crypto funds are saying, ‘Hey, we’re a fintech fund,’” Hadick said. “And that’s exactly where I think we’re doing better than anyone else.”

The increasing integration of blockchain with the financial industry has raised a disturbing question: Is cryptography betraying its original purpose—to portray Bitcoin as a rebellion against the control of big banks and governments over the financial system?

"I've always tried not to look at the big picture: we've taken this digital internet currency from zero to trillions of dollars in 10 years," Schmidt said. "This work is clearly not finished yet, and globally, I think the demand for this thing is greater than ever before."

Now, nearly four years after Hadick joined, the crypto venture capital industry is facing another identity crisis, with declining trading volumes and funds struggling to persuade investors to continue funding. But with its newly raised capital, Dragonfly is poised to shape the next era of blockchain. "We speak loudly, we're outspoken," Qureshi said. "In a field rife with bullshit, scammers, and big charlatans, I think that's actually a superpower."