As an analyst with over two decades of experience in venture capital and technology, I find myself increasingly intrigued by the rapidly evolving landscape of cryptocurrency investments. The influx of funds into crypto-related ventures this year is undeniably noteworthy, as evidenced by the impressive fundraising rounds highlighted in this week’s roundup.
This year, venture capitalists have significantly increased the amount of funding they’re putting into cryptocurrency-focused projects, marking a stark contrast to the disappointing decline in investments from the previous year.
As per the recently released PitchBook report dated September 5th, the typical fund size has increased by a substantial 65.1%, reaching an estimated $41.3 million for the year 2024.
Currently, it’s not uncommon for experienced crypto investors to establish mid-sized venture capital funds for cryptocurrencies. These funds typically hold between $100 million and $500 million. As Robert Le, a Senior Analyst at PitchBook, notes, these funds offer an optimal balance: they are substantial enough to fuel industry expansion yet manageable enough to bypass the deployment challenges encountered by gigantic funds. Consequently, they play a vital role in the current investment landscape.
But just because the money is there doesn’t mean VCs aren’t cautious. According to Le, the time between fundraises and the duration to close funds have both lengthened over the past three years.
The current pattern indicates that we may face difficult times for fundraising in the future, as Limited Partners are becoming pickier and less willing to take risks following the financial market’s recent declines,” Le explains.
As a researcher, I’d like to highlight an interesting trend I’ve observed: In the second quarter of this year, data from Galaxy indicates that Venture Capital (VC) investment in companies focusing on crypto and blockchain surged by approximately 28%, amounting to nearly $3.2 billion. However, this money was distributed across 577 deals, representing a 4% decrease compared to the previous quarter. In contrast, the preceding three-month period saw a 29% increase in VC investment in crypto and blockchain startups compared to the quarter before, with about $2.49 billion invested in 603 deals.
This week’s article on crypto.news highlights several startups that have made news lately. As reported by Crypto Fundraising tracker, these businesses collectively raised approximately $70 million in venture capital investments from September 1st to September 7th.
Balance, $30 million
- Gaming platform E-PAL introduced Balance, a new AI-powered blockchain experience platform, following two successful funding rounds led by Andreessen Horowitz (a16z) and Galaxy Interactive.
- Animoca Brands, K5, CLF Partners, MK Capital, Heights Fund, AMBER, MarbleX, Mantra, Tuna, Aptos Labs, IOBC, Leland Ventures, Halon, Uphonest, Taisu Ventures, Gate Labs, DWF Ventures, BING, and WAGMI, also contributed to the $30-million total.
- The proceeds will go toward developing the Balance infrastructure — “an open, inclusive, and equitable Web3 ecosystem.”
Hypernative, $16 million
- Hypernative, known for developing an early-detection web3 security solution, raised $16 million to accelerate adoption of its AI-powered security products.
- Investors in the Series A led by Quantstamp include Bloccelerate VC, Boldstart Ventures, Borderless Capital, CMT Digital, IBI Tech Fund, Knollwood Investment Advisory, Re7 Capital, and some notable angels.
- This brings the total raised by Hypernative to $27 million. The startup previously collected $9 million in funding from Boldstart and IBI.
Puffpaw, $6 million
- PuffPaw, a blockchain-based e-cigarette project, clinched $6 million in seed funding led by Lemniscap Ventures.
- The project is geared toward users who wish to quit smoking. It records their smoking habits and rewards them with tokens.
TrendX, $5 million
- TrendX successfully closed its Series A funding round, clinching $5 million.
- AHZ, Promontory, Coinstash, Frontier Research, Coresky, Tido Capital and Bullperks
- The startup previously raised $1 million in seed money, bringing the total to $6 million.
IDA, $6 million
- IDA, a Hong Kong-based digital asset company, secured $6 million in a seed funding round led by CMCC Global, under its Titan Fund, and Hashed.
- The company aims to launch its “first fiat-referenced stablecoin” called HKDA, which is designed to be regulated in Hong Kong.
- Hack VC, Anagram, GSR, Protagonist, Brinc, Chorus One, Kenetic, SNZ, and Yolo Investments also joined the fundraising effort. Raj Gokal, co-founder of Solana, is a backer.
CryptoHunter World, $2.8 million
- CryptoHunter World, a hybrid gaming service, completed a $2.8 million private sale round.
- Supported by leading venture capital firms, including IOST, HG Ventures, Mindfulness Capital, Bigcandle Capital, Web3Wave, and Layer-OTC, this fundraising will help bring the blockchain-based collectible role-playing game into the web 3.0 space.
Additional funding rounds: undisclosed amounts
- Blabla
- Arris
- Dropnest
- Cycle Network
- Vanilla Finance
- Yooldoo
- Uxlink
- Kroma
- Pencils Protocol
For last week’s edition of our “Crypto VC” column, click here.
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2024-09-07 20:38