The Impact of Crypto Winter on Fundraising
The crypto industry has experienced a significant decline in fundraising due to the ongoing crypto winter. In Q3, new record lows were reached for both the total funding amount and the number of deals. This marked a 36% decrease compared to the previous quarter, with the quarterly figures falling below $2.1 billion across 297 deals.
DeFi Takes the Lead in Funding
According to Messari’s report, decentralized finance (DeFi) was the sector with the highest number of funded deals in Q3, totaling 67. Chain infrastructure received the largest proportion of funding, accounting for 18% of the total. The gaming sector also performed well, attracting nearly $250 million in investments.
Within the DeFi sector, exchange projects dominated investment, representing 38% of all invested capital across 33 deals. A total of $210 million was secured by DeFi projects, with an average deal size of $3 million. Binance Labs played an active role in this sector, participating in seven deals during the quarter.
Binance Labs Leads in Investment Activity
Despite facing legal challenges, Binance Labs emerged as the most active investor in Q3. With 23 deals, it surpassed other investors by a significant margin. Throughout 2023, Binance Labs focused on investing in DeFi and gaming projects and also showed interest in zero-knowledge and privacy technology developments.
Notably, 12 of Binance Labs’ deals were with projects participating in its accelerator program. Even excluding these accelerator-related investments, the firm’s remaining 11 investments would still tie it with Robot Ventures for Q3 deal activity.
Hot Take: Crypto Winter Slows Down Fundraising Efforts
The crypto industry has faced a significant setback in fundraising during Q3, with record lows in both funding amount and deal numbers. DeFi emerged as the top-funded sector, attracting a high number of deals and investment in exchange projects. Binance Labs stood out as the most active investor, despite ongoing legal battles. The decline in fundraising highlights the challenges posed by the crypto winter, but sectors like DeFi and gaming continue to show resilience. As the industry navigates through this challenging period, it will be interesting to see how fundraising efforts evolve and which sectors emerge as leaders in the future.
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