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What the numbers say: Global crypto startups raked in $2.4B in VC funding in Q1 2023, around 80% lower than the $12.3B raised during the same quarter a year ago. Despite ending the quarter with the lowest quarterly funding total since 2020, crypto funding showed little signs of recovery, increasing month-on-month in February and March. Per Galaxy research, median deal sizes declined from a peak of $4.5M in Q3 2022 to $2.5M in the current quarter. The median pre-money valuation during Q1 2023 was $18.8M. What happened: Per Pitchbook analyst Robert Le, the funding for the cryptocurrency industry, which was already in decline owing to a bear market and regulatory difficulties, further decreased due to rising interest rates and the failure of banks in the first quarter of this year. Le adds that VCs are now "conducting months of research" and due diligence before investing in crypto startups since the downfall of crypto exchange FTX. What's next: VCs are still interested in crypto infrastructure, data analytics, and developer-focused startups. |
