October 3, 2023

Web3 Startups Raised $1.3 Bln in Q3, Lowest Yearly So Far

Web3 startups

Web3 startups

Investments in Web3 startups within the crypto sector have been declining for seven consecutive quarters since the fundraising peak in Q4 2021, according to new data from Crunchbase.

Although August’s fundraising numbers exceeded expectations, the trend of declining investments continued in Q3. However, there is optimism for a potential break in the trend with the recent launch of investment vehicles such as Vessel Capital’s $55 million fund and MoonPay’s venture arm. Whether investors will act swiftly and invest more significantly remains to be seen.

According to Crunchbase’s data, Web3 startups raised $1.3 billion in the third quarter, which is a decrease from the approximately $2 billion raised in both Q1 and Q2. These figures are comparatively very low in contrast to the last few years, where Web3 startups raised more than $8 billion each quarter between Q3 2021 and Q2 2022. However, this trend took a sudden downturn, and the $4.5 billion raised by crypto startups in Q3 2022 is only about half of the amount raised in Q2.

It has been reported that venture funding in the blockchain industry has decreased by 50% compared to the first quarter of 2023. During that time, 228 projects received a combined $2 billion, while in the second quarter, 171 blockchain-based ventures received $1.5 billion, which is a decrease of 33%.

Furthermore, the industry raised $460 million in July, $283 million in August, and $352 million in September globally. However, this marks a significant decrease of 77% compared to September 2022, when the industry raised $1.5 billion. According to DeFiLlama data, this is the lowest amount of capital investors had injected into the industry since the third quarter of 2020, when it received a little over $924 million.

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