- Messari shares its latest crypto fundraising report for Q3.
- Data revealed that the current state of crypto venture funding is the lowest since 2020.
- 54% of Q3 active investors are from the United States.
The current state of venture funding in the crypto industry is a shadow of what it used to be.
Messari’s latest research report examined the state of crypto fundraising in the third quarter of 2023. The research dissected the crypto venture funding sector, highlighted the crypto sectors that maintain success in funding despite crypto winter, and compared data reports spanning four years.
We read Messari’s latest research report on crypto fundraising, so you don’t have to. Here is a simple breakdown of the top four things to know.
The Current State of Crypto Fundraising: Lenses on Q3 2023
Cryptocurrency fundraising has taken a long dive since the industry saw one of its best booming markets in Q1 2022.
According to Messari’s data report, the crypto venture funding space is in its lowest state since the last quarter of 2020.
Before the occurrence of unfortunate events that disrupted the crypto industry, the crypto venture funding sector amassed over 800 funding deals worth over $15 billion between Q4 2021 and Q2 2022.
Since the second quarter of 2022, the crypto industry has been tormented by crypto winter, contributing to the underwhelming state of crypto venture funding this year.
The average funding secured in a series in 2022 was around $17 million, and several crypto projects raised similar amounts.
However, only a handful of crypto platforms have secured a similar amount in funding, with a large number of the deals hovering around $7 million.
While there are exceptional cases where a project secures a considerable amount in funding series, compared to the market state in Q1 2022, the current results are underwhelming.
Top Three Crypto Sectors Secure High Funding Despite Crypto Winter
The current state of crypto venture funding may be at an all-time low in contrast with the past, some sectors are more successful in securing funding deals than others.
According to Chase Devens, the author of the fundraising report, chain infrastructure, DeFi, and the gaming sector amassed the largest share of crypto venture funding in Q3.
“The chain infrastructure sector accounted for the largest share of funding during Q3 despite seeing only 21 deals. One-third of these deals took place in the smart contract platform subcategory, highlighted by Fhenix’s $7 million raise to build fully encrypted smart contracts.” the report stated.
The DeFi sector amassed 68 deals in Q3, the highest number of deals among the three sectors.
Majority of Active Crypto Investors Are From The United States, Data Reveals
According to Messari’s data research, the United States is the home to 54% of Q3 active investors. This is an interesting find as the country’s financial regulator currently leads the regulatory crackdown on the crypto industry.
Due to a lack of regulatory clarity and the stringent approach to regulation, several crypto firms are leaving the U.S. for crypto-friendly areas like Singapore, Hong Kong, and other rising crypto hubs.
Binance Labs Contributes to 23 Deals in Q3
The report highlighted Binance Labs as the most active investor for contributing to 23 DeFi and Gaming Sectors deals.
Robot Ventures, Coinbase Ventures, Hashkey Capital, and other venture funding companies were part of Messari’s top ten investors by deal count.