Venture Capital Funding for Crypto Startups Remains Stagnant
The bear market in the crypto industry has led to a decline in venture capital funding for crypto and web3 startups. The latest report on September’s VC funding reveals that the figures have not changed significantly from the previous month.
Crypto VC Funding Remains Flat
In September, there were a total of 77 publicly announced investment projects in the crypto VC sector, slightly higher than August’s 75 projects. However, this number is down by 44% compared to September 2022, which saw 138 projects raising funds.
The total funding raised in September was $510 million, a 24% decrease from August’s $670 million. Infrastructure projects accounted for approximately 30% of the financing, while DeFi projects made up around 22%.
The largest investment deal for the month was Bitmain, which agreed to provide 27,000 S19J XP miners to bankrupt Core Scientific in exchange for $231 million in cash and $539 million worth of Core Scientific common stock. Other significant funding rounds included Proof of Play ($33 million), Bastion ($25 million), Story Protocol ($25 million), and Supra ($24 million).
Web3 Funding Declines
Web3 startups raised $1.3 billion in the third quarter, a decrease from approximately $2 billion raised in both Q1 and Q2. On average, these startups raised over $8 billion per quarter between Q3 2021 and Q2 2022. Additionally, the $4.5 billion raised by crypto startups in Q3 2022 was more than triple the amount raised in Q3 2023.
Hot Take: Bear Markets are Opportunities for Savvy Investors
While the trend for web3 and crypto venture funding is currently declining, it’s important to note that significant investments are still being made. Bear markets present opportunities for building and the savvy investor understands that markets are cyclical and will eventually turn around. Despite the current challenges, the crypto industry remains dynamic and resilient, with potential for future growth.
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