Crypto Startups Attract $2.7 Billion in Q2 Despite Decline in Deal Volume
In the second quarter of 2024, crypto startups successfully raised $2.7 billion across 503 deals, signaling a notable uptick in funding despite a decrease in the number of deals. According to a recent PitchBook report, this funding total marks a 2.5% increase compared to the previous quarter, even as the number of deals dropped by 12.5%.
The report highlights a key trend: although fewer deals were completed, the value of each deal was generally higher, suggesting that investors are increasingly willing to commit larger amounts to fewer projects.
Positive Outlook for Crypto Investments
PitchBook analysts predict that the pace and volume of crypto investments are likely to increase as investor sentiment improves, provided there are no major market disruptions. This cautious optimism indicates a gradual return of confidence among investors in the crypto sector, with expectations of continued growth in the latter half of the year.
During Q2, infrastructure startups dominated the funding landscape. Monad, a parallelization Layer 1 platform, led the way with a substantial $225 million Series A funding round. This was followed by Berachain, a DeFi-specific Layer 1 platform, which secured $100 million in Series B funding. Additionally, the bitcoin restaking platform Babylon raised $70 million in an early-stage round. These large investments underscore the growing emphasis on infrastructure development within the crypto industry.
Other notable funding rounds included Farcaster’s $150 million Series A round, which resulted in a post-money valuation of $1 billion, and a $140 million early-stage round for the blockchain-based gaming platform Zentry.
Shifts in Valuation Trends
The report also revealed that valuations for seed and early-stage investments have risen compared to 2023. The median pre-money valuation at the seed stage reached $23 million, while the early-stage median valuation climbed to $63.8 million. However, late-stage valuations saw a decline, with the median figure dropping to $40.8 million, reflecting a less competitive environment for later-stage investments.
Crypto Startup Funding Surpasses $100 Billion
Over the past decade, crypto startups have experienced a dramatic surge in funding, surpassing the $100 billion milestone since May 2014. The peak of cryptocurrency startup funding occurred in October 2021, when over $7 billion was raised in a single month. The second-highest funding month was February 2022, with a total of $3.67 billion.
Recent data indicates that nearly half of all cryptocurrency funding originates from U.S.-based investors. The United Kingdom and Singapore account for 7.7% and 5.7% of the funding, respectively, based on figures from Q2 2023.
High-profile funding deals between late 2023 and the first half of 2024 have continued to drive the industry forward. Notable investments include $225 million each for Together.AI and the cross-chain protocol Wormhole, $101 million for open-source cloud storage firm Totter, and $100 million for Eigenlayer. Additionally, Swan Bitcoin raised $165 million, and Blockchain.com secured $110 million in funding.
These significant investments highlight the sustained confidence and growing interest in the cryptocurrency industry, suggesting that the sector’s upward trajectory is far from over.
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