Castle Island Ventures, the early-stage investment firm co-founded by blockchain pioneer Nic Carter and former Fidelity executive Matt Walsh, has successfully raised $250 million for its third dedicated cryptocurrency fund—marking its largest capital raise to date. The newly launched Castle Island Ventures III will focus on startups shaping the future of monetary networks, decentralized financial services, and next-generation internet infrastructure, including Web3 technologies.
Since its inception in 2018, Castle Island has steadily expanded its footprint in the digital assets ecosystem. Its debut fund secured $30 million, followed by a $50 million second fund in February 2021. With this latest milestone, the firm reinforces its position as a leading institutional backer of foundational crypto infrastructure and regulated fintech innovation.
Strategic Focus: Bridging Blockchain and Traditional Finance
The new fund will continue Castle Island’s mission of investing at the intersection of blockchain technology and the regulated financial system. According to Nic Carter, the firm sees enduring value in sectors such as digital asset brokerage, custody solutions, exchanges, lending platforms, and crypto-native banking models.
“That’s going to remain a big component,” Carter said in a recent interview. “We’re looking at companies that are building the rails for a more open, efficient, and transparent financial system—one that leverages decentralization without sacrificing compliance or security.”
This strategic emphasis allows Castle Island to appeal to both crypto-native entrepreneurs and traditional financial institutions seeking exposure to digital assets through equity-backed ventures rather than volatile token investments.
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Expanding Into Web3 and Decentralized Infrastructure
While financial services remain central to its thesis, Castle Island has significantly broadened its scope in recent years. The firm is now actively investing in Web3 infrastructure, including decentralized data storage, identity protocols, privacy-preserving networks, and application layers that reduce reliance on centralized tech giants.
Carter emphasized the importance of building an internet less dominated by Silicon Valley oligopolies:
“We’ve become much more active in internet infrastructure—projects that allow people to interact online without depending on a handful of gatekeepers. These are the foundational pieces of a truly user-owned web.”
This shift aligns with growing demand for censorship-resistant platforms and self-sovereign digital identities, particularly as global scrutiny over data privacy and platform monopolies intensifies.
Equity-First Investment Philosophy
One of Castle Island’s distinguishing features is its equity-focused approach—a deliberate contrast to many crypto funds that prioritize token purchases. By investing in company equity, the firm offers institutional limited partners (LPs) a familiar risk-return profile while supporting startups with sustainable capital structures.
For portfolio companies, this means access not only to funding but also to deep industry connections within asset management, regulatory compliance, and financial infrastructure—critical advantages when navigating complex legal landscapes or seeking banking partnerships.
This model has already proven successful. Past investments include Bitwise Asset Management, one of the first firms to launch a crypto index fund, and BlockFi, a prominent crypto lending platform (prior to its bankruptcy proceedings in 2022).
Leadership Growth: Ria Bhutoria Promoted to General Partner
In tandem with the fund announcement, Castle Island revealed the promotion of Ria Bhutoria, another Fidelity alum, to General Partner. She joins founding partners Nic Carter, Matt Walsh, and Sean Judge in leading investment decisions and portfolio strategy.
Bhutoria brings extensive experience in financial markets and risk analysis, further strengthening the firm’s ability to evaluate technical innovation through a traditional finance lens. Her promotion underscores Castle Island’s commitment to building a team fluent in both blockchain technology and institutional investing standards.
Investing Through Market Cycles
Despite a cooling in cryptocurrency prices and trading volumes in early 2024, venture activity remains robust. Carter views market downturns not as setbacks but as opportunities.
“When we launched our first fund in early 2018, it was an amazing time to deploy. There was a prolonged bear market. The founders we met were the ones that cared very deeply about this stuff. And the valuations were modest at the time.”
He added:
“A sell-off would make sense for us. I don’t want anyone to lose money. But from the perspective of being an allocator, the froth coming out of the market a little bit would be pretty welcome.”
This contrarian mindset has defined Castle Island’s strategy: backing resilient teams during uncertain times, focusing on long-term value creation over short-term speculation.
👉 See how top investors navigate volatility to find high-potential crypto opportunities.
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Frequently Asked Questions (FAQ)
What is Castle Island Ventures III?
Castle Island Ventures III is the firm’s third investment fund, totaling $250 million. It targets early-stage startups in blockchain-based financial services, monetary networks, and Web3 infrastructure.
Who are the partners at Castle Island Ventures?
The general partners are Nic Carter, Matt Walsh, Sean Judge, and newly promoted Ria Bhutoria—all with backgrounds in traditional finance and deep expertise in digital assets.
How does Castle Island differ from other crypto funds?
Unlike many crypto-focused funds that invest primarily in tokens, Castle Island emphasizes equity investments in startups. This approach appeals to institutional investors familiar with private equity and provides startups with stable capital and strategic guidance.
What types of companies does Castle Island invest in?
The firm backs early-stage companies working on:
- Blockchain-based financial services (exchanges, lenders, custodians)
- Decentralized internet infrastructure (Web3, identity, storage)
- Regulatory-compliant digital asset solutions
Why raise a new fund during a market downturn?
Bear markets often present better valuations and attract mission-driven founders. Castle Island has historically launched funds during volatile periods, allowing them to deploy capital strategically when competition is lower.
Where can I learn more about their portfolio?
While specific portfolio details are not publicly listed in full, known investments include Bitwise and BlockFi. Updates are shared via the firm’s official Medium page and public announcements.
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Final Thoughts
Castle Island Ventures’ $250 million raise signals sustained institutional confidence in blockchain innovation—even amid macroeconomic uncertainty. By combining equity-based investing with deep sector expertise, the firm continues to bridge the gap between traditional finance and the decentralized future.
As Web3 matures and regulatory frameworks evolve, firms like Castle Island play a crucial role in funding the infrastructure that will power tomorrow’s digital economy—building not just companies, but ecosystems.