What the numbers say: VCs deployed $1.8B into Web3 startups in Q2 2023, down 76% YoY from Q2 2022 when startups raised $7.5B, per Crunchbase. Despite the year-on-year dip, funding for the current quarter matched the preceding quarter, bringing the half-yearly total to $3.6B. The half-yearly total is still 78% down YoY compared to the same period a year ago. Relevance: Shariah-compliant crypto asset Islamic Coin's $200M round, LayerZero Labs' $120M Series B funding round, and Tools for Humanity's $115M Series C funding round were the three most prominent fundraisers in the sector in the recent quarter. What happened: The VC funding pullback has impacted the Web3 and blockchain industry the most as investors' interest in the domain waned due to bankruptcies and regulatory headwinds. However, prices of the two largest cryptocurrencies, Bitcoin and Ether, have increased 80% and 50%, respectively, so far this year. This could prompt investors to resume their investments in crypto startups. |
