Infrastructure Projects Raise Nearly $1B In A Week
Key Takeaways
- Venture capital went all-in on infrastructure projects this week, more than tripling investments into the crypto vertical at $942 million. The runner-up was NFT/metaverse projects, which raised $134.5 million over 7 projects that were mostly very early-stage funding rounds. CeFi and DeFi were relatively inactive, raising $40 million and $11 million, respectively. A mining infrastructure project raised $385 million in a mix of equity and debt, and three venture capital funds raised $711 million, one of which is a new entrant to the space.
- Active investors this week include a16z, Tiger Global, Alameda Research, and Morningstar Capital.
- Deal of the Week: Polygon secured a $450 million investment round after rolling out a zero-knowledge proofing mechanism to interact with Ethereum without broadcasting transaction details
Venture Capital Deals
Aleo is a layer 2 zero-knowledge (ZK) applications platform that lets developers build products for users that can integrate with layer 1 chains like Ethereum without communicating personal information to those chains. The project raised $200 million in a Series B round led by Kora Management LP and SoftBank Vision Fund 2. Other investors include a16z, Samsung Next, and Tiger Global, among others. The funding will help the Aleo development team to create a more user-friendly product suite to increase the platform’s developer activity. (Privacy-focused applications platform Aleo raises $200M)
Qredo is a decentralized infrastructure platform that provides tools for users to custody their assets, swap between blockchains, and perform transaction settlement. Qredo closed an $80 million Series A led by 10T Holdings, with Coinbase Ventures, Avalanche, and Terra participating as well, among others. Qredo’s main product is its decentralized custody service, which splits up private keys and customer data similar to what competitors like Fireblocks do, but its operations occur on a distributed blockchain so that the company itself never has control over customers’ private keys. (Crypto infrastructure startup Qredo closes $80 million raise led by Dan Tapiero’s 10T Holdings)
SIDUS HEROES is a play-to-earn (P2E) MMORPG for space exploration, city and world development, and PvP battling, a combination of simulation and real-time strategy game types. The project raised $21 million in a seed round led by Animoca Brands with participation from Alameda Research, Master Ventures, Polygon, OKEX, and Bloktopia participating. Players enter the world by purchasing an NFT hero, and earn rewards by completing in-game achievements. (SIDUS HEROES Receives Investment From Animoca Brands, Alameda Research, Bloktopia, OKEX, Polygon and Master Ventures)
Blitmap is an NFT-driven writing platform where owners of Blitmap NFTs get to help participate in the writing process around sci-fi stories. Through its parent company, Sup, the project raised $12 million in a seed funding round led by Paradigm. Participants in stories get to vote on features of stories, mostly around setting and side characters like villains. The new funding will be used to scale the project to create more story universes and projects for users to participate in. (Creator of Vine and Loot raises $12 million for NFT-powered sci-fi project)
RareCircles is an NFT-based subscription infrastructure provider where content creators can build an ecosystem for their followers with NFTs as the method of subscription. The company raised $7.5 million in a Seed round led by Tiger Global with participation from Hashed, White Star Capital, Global Founders Capital, and Alpaca, among others. The company is a Web3 version of platforms like Patreon to help creators gain even more control of monetizing and distributing their content, and the funding will help the RareCircles team to shore up infrastructure and further develop more customizability for creators. (RareCircles Raises $7.5M Seed Round, led by Tiger Global)
Nestcoin is a Nigerian Web3 social platform aimed at educating users about crypto and how it works in order to increase awareness and adoption throughout Africa. The company raised $6.5 million in a Pre-Seed round led by Distributed Global and Alter Global. Other participants include Alameda Research, Serena Ventures, and A&T Capital, among others. The funds will be used to build a crypto social media and education platform where content creators are rewarded for creating successful educational videos and content. (African Web3 Startup Raises $6.45 Million in Pre-Seed Round, Serena Williams’ Investment Firm Participates)
OpenNode is a Bitcoin payment processor that uses the Lightning Network to facilitate fast and cheap transaction settlement. The company closed a $20 million Series A led by Kingsway, with Twitter and Avon Ventures also participating in the round. OpenNode plans to use the funds for hiring and developing more product offerings and partnerships that will help boost the adoption of Bitcoin as a form of payment, not just an investment. (BITCOIN COMPANY OPENNODE RAISES $20M AT $220M VALUATION)
Newton is a Canadian crypto trading platform where Canadians can purchase and trade over 60 different tokens. The platform raised $20 million in a Series B, reaching a $20 million valuation. The lead investors were partners from DV Chain, with Singh Capital, Tiny Capital, and Snowdevil Capital participating in the round, among others. The fresh capital will help Newton further develop its platform and infrastructure, as well as supplement funding for operations and other general expenses. (Canadian Crypto Platform Newton Raises $20M Round at $200M Valuation)
Quantum Art is an Ethereum-based NFT platform aimed at minting and distributing photography NFTs. The project closed a $7.5 million Series A round led by True Ventures, Flamingo DAO, and Kevin Rose, among other popular members of the NFT community. The funding round will bring in True Ventures as a partner in Quantum Art, and will help bring in new artists, improve the technological infrastructure behind the platform, and expand its platform to include other forms of art beyond photography. (Justin Aversano’s Quantum Art Ethereum NFT Platform Raises $7.5M)
Compute North is a Bitcoin mining infrastructure provider that builds data centers and leases space to mining companies, reducing miners’ upfront capital costs to only acquiring mining rigs. The company closed a $300 million debt raise coupled with an $85 million Series C equity funding round led by Mercuria and National Grid Partners. The debt financing came from Generate Capital. Compute North will use the fresh capital to build new data centers that will add capacity in anticipation of a new wave of mining demand. (COMPUTE NORTH RAISES $385M IN CAPITAL GROWTH ROUND)
Humanode is a crypto-biometric infrastructure project that is an in-house project at crypto investment firm Paradigm. The project raised $2 million in a Seed funding round led by Republic Capital, with Tribe Capital, Blizzard, and Shima Capital participating, among others. The concept behind incorporating biometric data into a blockchain is to provide a more secure method for validation of transactions by indisputably limiting each person to one single node while increasing decentralization of the chain by making every user a validator node. The project is expected to launch a mainnet in June 2022 after a successful beta launch on its testnet. (Crypto-biometric network Humanode raises $2M in seed funding)
Alchemy is a blockchain API infrastructure platform that helps power Ethereum-based DeFi and NFT applications such as OpenSea, Aave, and SushiSwap to name a few. Alchemy raised $200 million in a Series D funding round that valued the company at $10.2 billion, up from $3.5 billion in October. The round was led by Silver Lake and Lightspeed Ventures. The capital is intended to provide funds for a new venture capital line of business, improve and expand their product suite to more chains, and launch Web3 University to help educate people on crypto and the Web3 space. (Alchemy raises at $10.2 billion valuation in round led by Silver Lake)
Ethernity is an Ethereum-based NFT marketplace that is built around direct drops from celebrities and athletes like Lionel Messi, Shaquille O’Neal, and the estate of Bruce Lee, among others. The project closed a $20 million Seed round that included Morningstar Ventures, Ripple, Algorand, and Polygon Studios, among many notable individual investors. The capital will help launch the Ethernity marketplace as well as create Ethernal Labs, which will develop Ethernity while also consulting for play-to-earn gaming economies and cross-chain technologies for NFTs. (Ethernity Raises $20M for Ethereum Celebrity NFT and Gaming Push)
Everyrealm is a metaverse real estate investment firm that is a spinoff from parent company Republic Realm. The firm raised $60 million in a Series A led by a16z. As of writing, Everyrealm holds over 3000 NFTs in 25 virtual worlds like Sandbox and Decentraland. The company’s investment strategy is to purchase and develop virtual real estate in order to add value to the investment while also creating cashflows through leasing space or providing interactive experiences such as pay-to-play games and shopping. (Metaverse Land Investor Everyrealm Raises $60M Led by Andreessen)
ssv.network is an Ethereum-based staking infrastructure provider that will distribute staked ETH among a variety of validator nodes. The project raised $10 million in a funding round from Coinbase, Lukka, OKX, and DCG. A major concern with the Ethereum Merge, when the second-largest cryptocurrency switches from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism, is that staked ETH will be concentrated among a small group of validators, wiping out Ethereum’s decentralization of control over the blockchain. In order to solve this, ssv.network is creating an infrastructure for centralized exchanges to ensure that their customers’ staked funds get evenly distributed across thousands of validators to maintain a decentralized ledger. (ETH Staking Startup ssv.network Raises $10M as Ethereum ‘Merge’ Inches Closer)
Primex is a decentralized margin trading platform that services both lenders and traders by providing a transparent and automated market making infrastructure. The company closed a $5.7 million Seed round led by Stratos Technologies and CoinFund, with Parachain Ventures, Morningstar Ventures, and Mapleblock participating, among many others. On Primex, lenders provide liquidity to liquidity pools and earn interest off of their deposits, and traders can use that liquidity to trade on margin on a variety of decentralized exchanges. Primex has a tool that grades traders based on risk, so that liquidity pools correspond to risk buckets in order to match lenders with traders that meet their risk tolerance. (Primex Finance Raises $5.7M Seed Funding to Close the Gap Between DEXs and Lending Protocols)
Aperture is a cross-chain DeFi strategy platform to perform complex, multi-chain DeFi investing strategies through one interface. The project raised $5.3 million in a Seed round led by ParaFi Capital, with participants including Arrington Capital, Rarestone Ventures, and Costanoa Ventures, among many others. Many DeFi strategies today require a long list of token swaps and activity across multiple chains. There exists a valuable niche for a company like Aperture to be an intermediary that will simplify the user experience and execute those complex yield farming strategies through a single interface with an automated backend. (Aperture Raises $5.3M to Build A Cross-chain DeFi Investment Ecosystem with A Marketplace for Strategies)
New Venture Capital Funds, Ecosystem Funds, and Alliances
Arca is a crypto asset management company with over $500 million in AUM and notable investments in Alethea, Raremint, and CXIP, among others. The company finished raising a new $50 million fund that will focus on acquiring individual NFTs. The purpose of the fund is to provide immediate cashflows through yields on top of high-risk / high-reward investments for accruing value. Investments will include utility and reward, DeFi-integrated, music and video royalty, and gaming NFTs for income generation. For value accrual-specific investments, Arca will purchase art and collectibles, digital property, and AI and identity NFTs. (Crypto investment firm raises $50 million for fund that will buy individual NFTs)
Animoca Brands is an active venture capital investor in the crypto community, covering the whole gambit from gaming to NFTs to layer 1s to DeFi. Three weeks ago, the company raised $359 million in a deal that valued Animoca at $5 billion. KKR & Co. joined late, adding $141 million to bring the total funding round to $500 million. The new investment kept Animoca’s valuation at $5 billion. The previous round and the new capital are planned to fund investments into NFT and metaverse projects that are focused on increasing public adoption of the metaverse. (Investment firm KKR to up Animoca Brands’ newest funding to $500 million: report)
Infinity Venture Crypto is a Web3 venture capital firm that plans to help grow Web3 as the means for connecting the East and West. The company finalized a $70 million raise for its first fund that will invest in early-stage Web3 startups in Asia and the Americas with 55% and 35% allocation, respectively. Participants in the fundraising include Circle, DCG, and Animoca Brands. Infinity Venture also announced that over 30% of the fund has already been invested across 80 deals, with a notable investment in the Filipino gaming guild YGG alongside a16z. (Infinity Ventures Crypto Closes $70M Fund)
Polygon (MATIC) is an Ethereum layer 2 scaling solution that allows developers to use a variety of scalability technologies when constructing their side chains to create fast, low-cost transactions within the Ethereum ecosystem. The project raised $450 million in a private token sale led by Sequoia Capital with participation from SoftBank Vision Fund 2, Tiger Global, Galaxy Digital, Alameda Research, and DCG, among over 30 others.
Why is this a Big Deal
Polygon is the fifteenth largest cryptocurrency, increasing its market cap by over 160x in 2021 after concerns started to arise over Ethereum’s scalability. The project is a platform on which Web3 developers can build applications that can use many different types of methods for communicating with the Ethereum base layer like optimistic rollups and stand-alone side chains. Among its scaling products is a new investment into providing zero-knowledge (ZK) rollups that will fulfill all of the security and validation requirements of the Ethereum blockchain without divulging any personal information to the layer 1. By integrating an entirely new method for validating transactions on Ethereum sidechains, the Polygon team was able to demonstrate to investors and developers that the platform can be constantly iterated on in order to incorporate the newest and highest-demand technologies onto its platform to maintain technological relevance in the fast-evolving crypto ecosystem. The fresh capital will be split between its ecosystem fund and covering DevOps for each of its scaling products for the next three to five years. The ecosystem fund will help attract new users and applications through bounties and development awards in order to build a more dynamic Polygon ecosystem into the near future. (Polygon raises $450 million from SoftBank, Tiger, and others in a token sale)
