Infrastructure and DAO Tooling in the Spotlight

Key Takeaways

• Infrastructure remained the hottest sector in crypto this week, with Helium’s $200 million raise as the stand-out. NFT/metaverse projects also remain of interest to investors broadly. The sub-category of DAO tooling is gaining more traction with RabbitHole’s $18 million raise. Like last week, DeFi was relatively inactive, with only a few deals closed focusing on derivatives and cross-chain liquidity. 
• Active investors this week include Multicoin Capital, Tiger Global, Alameda Research, Polychain Capital, Dragonfly Capital, Seven Seven Six, Sequoia Capital, and Jump Capital, amongst others.
• Deal of the Week: 3Box Labs raised $30 million to support its development of the web3 social platform and composability network, Ceramic. Ceramic aims to provide a scalable infrastructure layer for data, a clearinghouse for sharing data models between network users, and an open API toolkit.

Venture Capital Deals

Blockchain interoperability Network, Axelar raised $35 million this week at a $1 billion valuation. Participants in the round include Dragonfly Capital, Polychain Capital, North Island Ventures, Rockaway Blockchain Fund, Cygni Capital, Lemniscap, Olive Tree Capital, Blockchange Ventures, Node Capital, amongst others. Axelar also continues to form partnerships with other notable blockchain networks and dApps, including Polygon, Polkadot, Cosmos, and Pangolin Exchange, to bolster cross-chain interoperability. (Axelar’s Universal Blockchain Interoperability Network Raises $35 Million to Reach $1 Billion Valuation)

Decentralized telecommunications network, Helium raised $200 million in a Series D round at a $1.2 billion valuation. Investors include Tiger Global, FTX Ventures, Khosla Ventures, GV, Multicoin Capital, Munich Re Ventures, and FirstMark Capital. Last summer Andreessen Horowitz led a token sale providing Helium with $111 million in funding. (Scoop: Crypto startup Helium raises $200 million)

Ref Finance raised $4.8M from Jump Capital, Alameda Research, and Dragonfly Capital to support the development of its automated market maker and stableswap marketplace on the Near Blockchain. The funds will be deployed to increase developer headcount. While Near aims to improve interoperability across ecosystems, Ref Finance’s core goal is to leverage Near to increase cross-chain DeFi liquidity. (DeFi Project Ref Finance Closes $4.8M Round Led by Jump Crypto)

Maverick Protocol raised $8 million in a strategic round from Pantera, Jump Capital, Circle Ventures, Altonomy, CMT Digital, Coral DeFi, Gemini Frontier Fund, GoldenTree Asset Management, LedgerPrime, Spartan Group, Taureon, and Tron Foundation, amongst others. Maverick is a novel permissionless derivatives protocol that plans to use the funds to fully develop its ‘Automated Liquidity Placement’ technology and open asset-listing model. (Pantera, Jump Crypto, Circle, and Gemini backing Maverick Protocol’s $8 Million Strategic Round)

Portals raised a $5 million seed round to support the development of its immersive virtual world platform. Portal will simplify the process for creators to build their own robust virtual experiences across gaming, entertainment, social, and other avenues by providing a rich digital asset library and drag-and-drop toolset. Solana-based projects including Audius, Magic Eden, and Raydium have already announced their own Portals experiences, as well as crypto exchanges FTX US and Binance.US. Participants in the round include Multicoin Capital, Solana Ventures, Foundation Capital, Alameda Research, Sino Global Capital, Mantis VC (The Chainsmokers), Wave7, Cultur3 Capital, SkyVision Capital, and MonkeVentures, amongst others. (Portals Announces $5 Million Seed Round)

RabbitHole raised an $18 million Series A this week co-led by Greylock and TCG Crypto. RabbitHole is a DAO tooling platform for contribution and participation management that allows DAOs to use easily incorporate on-chain credentialling. On-chain credentialling can come in different forms, but at the highest level, credentials can be NFTs that represent a user’s skills or contributions. In the future, DAOs may require participants to hold specific credentials like how many jobs require college degrees today. (RabbitHole Series A)

DIMO developer Digital Infrastructure Inc, raised $9 million in a seed round with participation from CoinFund, Variant Fund, Slow Ventures, Table Management (Bill Ackman), Wonder Ventures, Streamr, Stratos Technologies, Lattice, amongst others. DIMO aims to make it easy for consumers and fleets to take ownership of their mobility data, unlocking better apps and services in automotive finance, insurance, shared mobility, maintenance, and more. Since launching in December 2021, over 17,000 vehicles have been onboarded to the network across 700 fleets and dozens of mobility services companies. The funds will be used to open-source its software platform and release an SDK for developers to build their own DIMO applications, support hardware supply and manufacturing, help vehicles charge with clean power, and further decentralize the project. (Digital Infrastructure Inc. Announces $9 Million of Funding to Support Development of DIMO Network & App Ecosystem)

5ire raised $100 million via a capital commitment from GEM Global Yield LLC SCS (GGY) as it prepares to file for an IPO. Last month 5ire raised $21 million in its seed round, valuing the company at $110 million. This previous round had participation from Alphabit, Marshland Capital, Launchpool Labs, Moonrock Capital, amongst other institutional investors. According to its website, 5ire is a sustainable and interoperable blockchain aiming to bring a paradigm shift from a for-profit to a for-benefit economy and enable the 5^th industrial revolution. (Blockchain startup 5ire secures $100 million capital commitment from GEM)

Ethereum wallet Rainbow raised an $18 million Series A with participation from Seven Seven Six, Thirty Five Ventures, Hyperguap, Uncommon Projects, Y Combinator, Nikita Bier, Bloom Investment Holdings. Rainbow will compete with MetaMask, allowing users to buy crypto and interact with web3 and DeFi dApps. Reddit co-founder Alexis Ohanian commented that Rainbow is the “best designed” crypto wallet. Ohanian led the round via his venture capital fund Seven Seven Six. (Ethereum wallet Rainbow raises $18 million in round led by Reddit co-founder’s VC fund)

BUD is a 3D social network that raised $15 million in funding via a Series A+ round. Investors are primarily China-based, including Qiming Venture Partners, Source Code Capital, GGV Capital, and Sky9 Capital. Following its launch in November, BUD quickly entered the top 10 social apps on Android in several countries, including the U.S., according to App Annie. BUD was founded by former Snap engineers Shawn Lin and Risa Feng in 2019. (3D social network BUD raises $15M in Series A+ round)

Hyperspace (formerly Solanalysis) raised $4.5 million in a seed round led by Dragonfly and Pantera Capital. Other investors include Jump Capital, Solana Capital, NFX, Galaxy Digital, Shima Capital, Coinbase Ventures, Sfermion, 6^th Man Ventures, Soma Capital, Social Capital, and Folius Ventures. Hyperspace is looking to gain market share in the NFT space as a trading aggregator for Solana-based NFTs. The company noted that they plan to raise additional funds in the next few months to support growth. (Solana NFT data site Solanalysis rebrands to hyperspace and raises $4.5 million)

MixMob raised $7 million in seeding funding from DeFiance Capital, Ascensive Assets, Not3Lau Capital, IOSG Ventures, Merit Circle, Genblock Capital, Shima Capital, Avocado DAO, Maven Capital, Morningstar Ventures, Solana Insiders, and Skynet Trading, among others. MixMob is a Play-&-Earn gaming experience on Solana that combines music, fashion, art, and movies with NFTs. The overarching goal is to connect play-&-earn with user-generated content. (MixMob Raises $7 Million in Latest Seed Funding Round)

Housecat allows users to copy the investment strategy of any wallet on Polygon in an attempt to democratize investing. Housecat raised $3.5 million in funding via a seed round from BlueYard Capital, Inflection, Notation Capital, 3KVC, and several angel investors. Interestingly, Housecat allows the copied wallet to receive a percentage of the trading profits from successful strategy copying. (Crypto copy-trading protocol Housecat emerges from stealth with $3.5 million in funding)

Backdrop is a web3 application built to allow people within and across DAOs to more easily communicate and participate. Backdrop falls under the heating up DAO Tooling space and raised $1.7 million in initial funding to build out the platform further. The raise announcement was accompanied by another that the platform is officially live. Investors include Seed Club Ventures, Lemniscap, Scalar Capital, el cap, betaworks ventures, and Coinbase Ventures. (Backdrop does live to help you participate in tokenized communities)

New Venture Capital Funds, Ecosystem Funds and Alliances 

Prominent Silicon Valley-based venture capital firm Sequoia Capital launched a $500-600 million crypto fund this week. The fund will look to take positions in liquid tokens traded on widely used exchanges. It will also take a long-term, 20-year approach and avoid trading in and out of positions outside of “exceptional circumstances.” For background, Sequoia currently holds about ten crypto investments across its portfolios, including the decentralized social media platform, DeSo, and decentralized storage network, Filecoin. (Sequoia Launches $500 Million Fund To Invest In Crypto Tokens As Silicon Valley Throws Billions At Blockchain)

Several venture capital firms and backers of The Graph launched a $205 million ecosystem fund dedicated to supporting dApp developers across DeFi, NFTs, DAOs, marketplaces, cross-chain infrastructure, and metaverse. For background, The Graph is an indexing protocol for querying decentralized networks like Ethereum and making data more readily available on-chain – similar to the indexing process Google has successfully employed in the web2 tech stack. Investors include Multicoin Capital, Reciprocal Ventures, gumi Cryptos Capital, NGC Ventures, DCG, and HashKey. (The Graph Backers Launch $205M Ecosystem Fund to Provide Grants to Dapp builders)

Financial infrastructure firm, Stronghold launched a $100 million fund for web3 and Fintech this week. The fund plans to invest across three core areas: overlooked and underrepresented founders and fund managers, payments and fintech ecosystem, and web3 and blockchain ecosystem, according to the company’s press release. Previously, Stronghold invested in Sam Bankman-Fried’s Alameda Research, as well as Precursor Ventures. (Stronghold Capital Launched With $100M Fund for Web3, Blockchain and Fintech)

This week Castle Island Ventures announced the raise of its newest $250 million fund, Castle Island Ventures III. The fund will target early-stage startups in the monetary network, financial services, and internet architecture spaces, including web3. The firm also announced the promotion of Ria Bhutoria to General Partner, who has been leading investing efforts in web3 with a focus on next-generation music distribution. (Nic Carter’s Castle Island Ventures Raises $250M for Third Crypto Fund)

Deal of the Week

3Box Labs raised $30 million to support its development of the web3 social platform and composability network, Ceramic. Ceramic aims to provide a scalable infrastructure layer for data, a clearinghouse for sharing data models between network users, and an open API toolkit. The series A equity raise was led by Multicoin Capital and Union Square Ventures. The funding will be used to double the headcount of 3Box Labs – increasing the number of product developers, engineers, and community leads. (USV, Multicoin Lead $30m Raise for 3Box’s Ceramic Data Network)

Why is this a Big Deal

News of the raise by 3Box Labs and further funding of Ceramic comes as concerns over internet censorship – whether it be on media distribution platforms like Spotify or social media platforms like Twitter – reach a fever pitch in the US. While users of these platforms have voiced their support for both pro and anti-censorship with reasonable motivations, companies have had to make difficult decisions around who they allow on their centralized platforms. We expect most platforms to take the most economically viable route, however, it is not yet obvious which route that will be in the long-run. Because of this, many crypto investors have begun making large bets on decentralized media distribution and social networks with the hope that a more open model removes the significant operational hurdle that centralized platforms are struggling with. If it’s any indication, traditional VCs (those that funded the current web2 ecosystem of platforms) are now some of the biggest backers of decentralized platforms. For example, DeSo Labs raised $200 million from Andreesen Horowitz, Sequoia Capital, and Reddit co-founder Alexis Ohanian, in addition to crypto native VCs last year.