Crypto Ventures Witness 52.5% Leap in VC Funding, Tally Reaches $1.16bn in March
Summary:
Cryptocurrency ventures experienced a 52.5% increase in venture capital (VC) funding in March, amassing $1.16 billion mainly for infrastructure and decentralized finance projects. The Ethereum blockchain project Optimism and cryptography startup Zama led the investments. Fundraising metrics surpassed those of the previous year, with a 25% rise in deal quantity and a 28% gain in total funding compared to March 2023. Andreessen Horowitz recently dedicated $30 million to a Web3 gaming fund, signalling growing VC interest in the crypto sector. Infrastructure projects received the biggest share of March's VC funding, followed by decentralized and centralized finance projects.
In March, cryptocurrency ventures saw a 52.5% increase in venture capital (VC) funding from the previous month, receiving $1.16 billion. The largest share of this investment went into infrastructure and decentralized finance initiatives. According to RootData, a record high of 180 deals successfully secured funding in this period, the highest monthly count since April 2022. Of all the successful fundraisers, 20% raised between $1 million and $3 million, while slightly over 15% secured between $5 million to $10 million. Most of these beneficiaries were based in the United States, although this only accounted for less than 10% of the total number of deals.
The biggest benefactor for the month was Optimism, an Ethereum layer-2 blockchain, which sold $89 million worth of its tokens in a private sale, followed by cryptography firm Zama, which raised $73 million in a Series A round.
Compared to February, the number of deals in March was up by 25% and by over 70% from the same time in the previous year. The total amount raised was 28% higher than the previous March. Recently, VC firms have shown interest in the cryptocurrency market, with Andreessen Horowitz (a16z) setting aside $30 million for a fund dedicated to Web3 gaming on the first of April.
The previous week saw a16z co-founder Marc Andreessen and Galaxy Digital making significant contributions to 1kx’s $75 million fund aimed at supporting crypto-based consumer applications. Also, Hack VC raised $150 million in February to support early-stage crypto and artificial intelligence startups.
In terms of funds received in March, infrastructure initiatives topped the list with nearly $283 million, about a quarter of the total VC funding for the month. They were closely followed by decentralized finance projects that received $228.1 million, or roughly 20% of the total. Centralized finance initiatives like exchanges were the third largest recipients, receiving $85.5 million. Meanwhile, no funds were raised under the DAO category.
March’s funding surge marked the first time monthly VC funding has surpassed $1 billion since November. This follows a subdued 2023 for crypto raises following the collapse of FTX in late 2022, which caused a ripple effect in the crypto markets. However, VC funding has seen monthly gains year-to-date, as renewed interest in cryptocurrency coincided with a market recovery. PitchBook attributes this turnaround to the debut of spot Bitcoin exchange-traded funds (ETFs) in the U.S.
Published At
4/2/2024 6:39:01 AM
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