What the numbers say: VC deployed $2.34B into crypto startups across 382 deals in Q2 2023, per Pitchbook. The total for the recent quarter represents an 80% drop over the record high of $12.14B set in Q1 2022. Relevance: LayerZero's $120M Series B funding round and Worldcoin's $115M Series C round were the two largest funding rounds that closed in Q2 2023. What happened: The sector was already facing the effects of the venture funding pullback. However, the situation worsened due to regulatory headwinds in the U.S. and the bankruptcies of notable crypto startups. As a result, valuations of crypto startups dropped 70% YoY in Q1 2023. Why it matters: Despite the decline, some investors remain optimistic about the sector's potential in the long run. Gvantsa Chkuaseli, the head of structuring and fundraising at Outlier Ventures, believes that despite the recent downturn, there has been an uptick in activity in early-stage firms. |
