Total Amount Invested in Crypto and Blockchain Startups
In 2023, venture capitalists invested $10.7 billion in crypto and blockchain startups, which is a 68% decrease compared to the previous year. Most of these investments occurred in the first half of the year, with a decline in the second half. However, there was an increase in funding in November. The proportion of deals allocated to pre-seed, seed, and Series A startups increased in 2023, while mid and later-stage deals decreased.
Verticals Dominating the Deals
The NFT/gaming, infrastructure, and web3 sectors maintained their dominance in terms of deal count. On the other hand, categories such as data, trading, and enterprise witnessed fewer deals.
Total Amount Invested in 2023
Although 2023 ranked as the third-highest year in terms of total investment, it was significantly lower than the record-breaking levels seen in 2022. The drop in funding was expected due to the macroeconomic environment, regulatory uncertainty, and previous failures. However, the intensity of the funding pullback surprised investors and founders. Despite the slowdown, the total investment in 2023 still surpassed prior bear markets.
Deal Count and Investment by Stage
The number of crypto VC deals decreased in 2023 compared to the previous year. There were 1,819 deals, representing a 32% decrease from 2022. Most of the funding flowed towards pre-seed, seed, and pre-Series A startups, while mid and late-stage startups experienced lower activity.
Investment by Sectors and Categories
NFTs and gaming continued to attract robust investment in 2023, along with infrastructure and web3. The distribution of funds among sectors appeared more diverse compared to previous years.
Expectations for 2024
Crypto VCs anticipate a surge in funding and deals in 2024, aligning with recent price shifts and expected bullish trends in the crypto markets.
Hot Take: Crypto Funding in 2023 Sees Significant Drop, but Recovery Expected in 2024
In 2023, venture capitalists invested $10.7 billion in crypto and blockchain startups, marking a 68% decrease from the previous year. This drop was largely expected due to the macroeconomic environment and regulatory uncertainty. However, despite the slowdown, the total investment still outpaced prior bear markets. The NFT/gaming, infrastructure, and web3 sectors remained dominant in terms of deal count, while other categories saw fewer deals. Looking ahead to 2024, crypto VCs anticipate a surge in funding and deals as the market recovers.
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