Venture Capital Surge in Web3 Firms Marks Resurgence of Crypto Interest in Q1 2024
Summary:
The first quarter of 2024 marked a considerable growth in venture capital (VC) investment in Web3 firms, with overall investment up by 55% and the number of VC investment deals increasing by 36% from the previous quarter. The report highlights the resurgence of venture capitalist interest in the crypto sphere, with significant investments flowing into AI and gaming-connected Web3 protocols. Paradigm, a crypto-focused VC firm, showcased this renewed interest by leading a $225 million funding round into Monad Labs. The period also witnessed several significant early-stage investment deals along with prominent funding rounds just ahead of the 2024 Bitcoin halving.
The first quarter of 2024 witnessed a robust surge in investments in Web3 companies, with a significant 55% growth. This trend indicates a resurrection of venture capital (VC) enthusiasm in the realm of crypto. Based on a Q1 on-chain report by QuickNode and Artemis, not only did the overall investments see a rise, but the count of VC deals in Web3 surged by 36% compared to the previous quarter.
Web3 protocols connected to artificial intelligence (AI) or gaming attracted the most investment, pointing to the first increment in investments in more than a year, and hinting at a positive transition in VC attitudes towards web3. Among all categories, it is perceived that AI and gaming attracted the most renewed venture capital interest.
Paradigm, a VC firm with a crypto focus, highlighted this interest by leading a collaborative funding effort amounting to $225 million into Monad Labs. Monad Labs intends to build a fresh layer-1 blockchain network to rival Solana, with the investment declaration made on April 9.
Berachain's early-stage $42 million Series B round and the $35-million pre-seed round for 0G Labs, a blockchain for data availability intended for AI protocols, were among the quarter's major early-stage rounds.
Seed round deals saw the biggest surge, increasing by 53% over the quarter, implying a growing interest in initial-stage deals. According to the report, compared to the previous quarter, Series A and seed funding rounds practically doubled their capital influxes, showing VCs' renewed willingness to invest in Web3.
Ahead of the 2024 Bitcoin halving, the crypto VC sector reignited. On April 9, Bitcoin's layer-2 network, Mezo, confirmed a successful completion of a $21-million Series A funding round directed by Pantera Capital. Mezo facilitates investors to profit based on the length of time they retain their tokens, which is referred to as a "Bitcoin Economic Layer".
Reports going around on April 3 declared Paradigm was in talks to boost up to $850 million for a new fund, setting it up potentially to be the biggest raise in the crypto domain since Andreessen Horowitz, a Silicon Valley-based VC company, set a record with $4.5 billion in May 2022.
Published At
4/17/2024 1:15:57 PM
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