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What the numbers say: Venture capital (VC) funding into Web3 startups declined to $1.7B in Q1, with an 82% decrease from $9.1B in the same quarter last year. The figure marked the lowest funding amount since Q4 of 2020, which saw only $1.1B in funding among Web3 startups. The number of deals also fell to 333 over the first three-month period of the year, down from 369 in the previous quarter and 500 in Q1 of last year. Relevance:Crunchbase data has shown that venture funding into the Web3startups declined sharply after Q2 of last year, which saw the collapses of several high-profile crypto companies. The drop in financing was mainly triggered by the multi-billion-dollar Terra ecosystem’s collapse in May 2022, which wiped over $60B of money off the crypto market. The bankruptcyof FTX, the previously third-largest crypto exchange, in November 2022 similarly caused a decline in venture funding by leading to the loss of investor confidence in the industry. Brands that should care:Canadian digital asset infrastructure company Blockstream and France-based crypto hardware wallet manufacturer Ledger became the only two firms raising nine-figure investments in Q1. Blockstream secured $125M in funding in January, while Ledger raised $108M in its Series C funding round in March. The third company with one of the biggest financing rounds of Q1 was the Israeli blockchain-focused semiconductor startup Chain Reaction , which raised $70M in a Series C funding round. |
