SBF Comes to the Rescue

• This week was an interesting one in funding from both venture capital and debt financing. After the insolvency of the high-profile hedge fund, 3 Arrows Capital, several crypto lending giants, including BlockFi and Voyager who lent money to 3AC, were left with potential losses totaling hundreds of millions of dollars. This caused the widespread panic of contagion risks until FTX and Alameda Research (each of which are companies founded by Sam Bankman-Fried or “SBF”) stepped in to provide capital. FTX signed a term sheet this week with BlockFi for a $250M revolving line of credit, and Alameda entered into a $500M loan with Voyager consisting of $350M USDC and 15,250 BTC. These credit facilities are presumably to help the lending platforms stay afloat and have ample liquidity among customers withdrawing their funds. FTX also made moves on the M&A front, acquiring Canadian trading platform, Bitvo, and Embed Financial technologies, a stock clearing business. This demonstrates just how well-capitalized FTX and Alameda Research are in an industry where many companies are currently facing liquidity issues.

• On the venture side, there was an increase in deal activity across the board. Total deals increased from 24 to 32, and the total amount funded increased over 500%, from $290M to $1,506M ($756M when not accounting for the debt deals related to crypto lenders). Each sector saw a significant increase in funding from last week. NFT and CeFi funding saw some of the largest increases, with NFTs increasing from $26M to $155M and CeFi increasing from $84M to a massive $956M.

• Like the last few weeks, deal activity remains concentrated in the early stages. Pre-Seed and Seed deals accounted for ~68% of deals, at 15.8% and 52.6%, respectively. However, there were some later-stage deals. Series C and D deals each accounted for 5.3% of deals.

Deal of the Week

FalconX, a digital asset platform for institutions, raised $150M in a Series D funding round at a valuation of $8.0B. The funding round was led by Singaporean wealth fund GIC as well as B Capital and included new and existing investors. New investors include private equity firm Thoma Bravo and Adams Street Capital, and existing investors include Tiger Global Management and Wellington Management. FalconX offers institutions digital asset services in trade execution, credit and treasury management, prime offering, and market-making, among others.

Why is this a Big Deal?

Despite tough market conditions, this raise more than doubles FalconX’s valuation in 10 months. While crypto companies such as Coinbase and BlockFi have been laying off employees, FalconX plans on increasing its workforce by 30% in the coming months and also plans to use the proceeds of the deal in acquisitions, technology, and data analytics, expanding its services. This goes to show the product-market fit that FalconX has found among institutions entering the space. Like FTX, FalconX is looking to take advantage of market conditions to acquire companies at discounts. FalconX CEO, Raghu Yarlagadda stated, “Over the next 12 to 18 months, we do expect a very volatile market. And, given that volatility, we see very strong opportunities for acquisitions.”

Deals & Fundraising

Vibe Bio, a Web3 app working to build communities to find and fund treatments for rare diseases, has raised $12 million in a Seed Funding round. This is the second major decentralized science project to receive funding this month and was led by Initialized Capital with participation from Naval Ravikant, Balaji Srinivasan, and 6th Man Ventures, among others.

Magic Eden, the leading NFT marketplace on Solana, raised $130M at a $1.6B valuation. This significant valuation is up there with Ethereum’s leading NFT marketplace, Opensea, Series C valuation of $13 billion as two of the largest valuations in the NFT space. Magic Eden’s round was co-led by Electric Capital and Greylock. 

EcoWatt, a renewable energy company tokenizing carbon credits and offering Web 3.0 solutions, raised $110M in a financing round led by GEM Digital Limited. EcoWatt enables corporate clients to achieve their carbon-neutral goals and rewards stakeholders for participating in climate action projects.

Prime Trust, a provider of API-driven open banking solutions, raised $107M in a Series B funding round. Prime Trust looks to use this funding to broaden its product categories, including crypto retirement products and asset tokenization. Investors in this round included FIS, Fin Capital, William Blair & Company, and Kraken, among others.

Style3D, the world’s first digital platform for creating and collaborating with virtual samples, raised $100 million in a Pre-Round B+ financing round. This is the following investment from GL Ventures, CDH Investments, and other institutions.

Astaria, a DeFi project that provides an NFT Lending Platform with instant liquidity, raised $8M in a Seed Round from investors such as True Ventures, Arrington Capital, Ethereal Ventures, Wintermute, and Genesis. Astaria was founded by former Sushiswap veteran, Joseph DeLong.