Crypto-focused venture capital investors are trucking along in their work. Many remain confident in their investing strategies despite an enervated first-quarter market for crypto startup fundraising. Others are noticing a sharper decline in investing pace.
“I definitely saw a big slippage and drop in activity [in] Western markets,” in Q1 2023, said David Gan, founder and general partner of OP Crypto. “I don’t think people are heavily deploying, and rounds are taking a lot longer to close than ever before.”
In Q1, $2.53 billion in capital was raised across 347 crypto and blockchain companies, down 79% from $12.27 billion in the year-ago quarter and a decrease of about 18% from $3.08 billion raised by the same corporate cohort in the previous quarter, according to preliminary PitchBook data.
The stark contrast from the year-ago quarter is unsurprising. The crypto world was in a different place back then. FTX, for example, was still a prominent crypto exchange and raised a toptechtrends.com/2022/11/09/sequoia-capital-marks-its-ftx-investment-down-to-zero-dollars/” target=”_blank” rel=”noopener”>$400 million round, bringing its total capital raised to $2 billion and giving the company a valuation of $32 billion at the time.
The climate has changed since then: toptechtrends.com/2022/11/11/ftx-files-for-bankruptcy-ceo-sam-bankman-fried-steps-down/” target=”_blank” rel=”noopener”>FTX crumbled and toptechtrends.com/2023/03/23/terra-creator-do-kwon-reportedly-arrested-at-montenegro-airport/” target=”_blank” rel=”noopener”>Terra/Luna collapsed (and brought down $40 billion with it). Meanwhile, a series of Chapter 11 bankruptcy filings transpired across mega crypto institutions, including FTX, toptechtrends.com/2022/11/28/blockfi-files-for-chapter-11-bankruptcy/” target=”_blank” rel=”noopener”>BlockFi, toptechtrends.com/2022/07/01/crypto-mega-hedge-fund-three-arrows-capital-reportedly-files-for-bankruptcy-in-new-york/” target=”_blank” rel=”noopener”>Three Arrows Capital, toptechtrends.com/2022/07/13/celsius-one-of-cryptos-biggest-lenders-files-for-bankruptcy/” target=”_blank” rel=”noopener”>Celsius Network, toptechtrends.com/2022/07/06/crypto-broker-voyager-digital-files-for-bankruptcy/” target=”_blank” rel=”noopener”>Voyager Digital and toptechtrends.com/2023/01/19/dcgs-crypto-lending-subsidiary-genesis-files-for-chapter-11-bankruptcy/” target=”_blank” rel=”noopener”>Genesis Global Trading.
This past quarter was a “thawing of people wanting to open their checkbooks,” Michael Terpin, CEO of Transform Ventures, said. “Right after FTX, it’s predictable that no one wanted to invest in anything.”
toptechtrends.com/2023/03/31/crypto-q1-decline-analysis/”>Investors unfazed by Q1 crypto funding decline by toptechtrends.com/author/jacquelyn-melinek/”>Jacquelyn Melinek originally published on toptechtrends.com/”>TechCrunch
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