- Crypto venture capital investment is decreasing
- The most popular startups
- Galaxy Research conclusions
The amount of venture capital invested in crypto and blockchain startups continues to decrease quarter-on-quarter. The US remains the leader in the number of crypto startups.
Crypto venture capital investment is decreasing
In the second quarter of 2023, the amount of investment into the crypto market dropped to 2.32 billion US dollars, the lowest level since the fourth quarter of 2020. The capital investment peaked in the first quarter of 2022 at 13 billion US dollars. Over the past three quarters, less money has been invested into crypto-related startups than in that most successful quarter.
As for the geography of crypto investment, the United States dominates the market with a share of 45%. Far behind are the United Kingdom (7.7%), Singapore (5.7%), and South Korea (5.4%).
The deal size is also decreasing: the median preliminary valuation for crypto and blockchain-related VC deals has decreased to its lowest level since the beginning of 2022, dropping to 17.93 million US dollars. The median crypto deal amounted to 3 million US dollars on the pre-money valuation of 17.93 million US dollars.
The most popular startups
The startups that have attracted most VC represent such areas as trading and exchange, investment, and lending. They have raised 473 million US dollars, or 20% of total venture capital invested.
- Web3, NFT, Gaming, DAO, and Metaverse startups followed them at 442 million US dollars, or 19% of total venture capital deployed.
- The Layer 2 / Interop sector had the quarter’s largest deal with LayerZero raising 120 million US dollars in a Series B funding round.
- Magic Eden closed the largest Web3 / NFT deal at 52 million US dollars.
- Auradine closed the largest infrastructure deal at 81 million US dollars.
- River Financial closed the largest trading and exchange deal at 35 million US dollars.
Galaxy Research conclusions
According to the report, this is not the first time that venture capitalists slow down their investment. This crisis occurs due to the fact that the tougher financial conditions affect the ability of venture companies to attract investment in all spheres.
The report states, “Venture-backed startups have had more difficulty raising new rounds this year and will continue to face a difficult fundraising environment for the foreseeable future.”
This article is based on: www.galaxy.com
