Infrastructure Remains VC's Focus

Funding was down this week, dropping from $607M to $241M, as total deals fell from 26 to 18. While infrastructure remained the highest funded sector at $158M, it declined nearly 68% from last week’s huge week. The only sector that saw an increase from last week was NFTs. This was due entirely to a $54M raise for Doodles, which puts the Web3/NFT company at a whopping $704M valuation. We discuss this deal more in our Selected Deals Section. The lowest funded sector this week was Metaverse/Gaming, which only had one deal (MetaFi), and received $3M in funding. Metaverse/Gaming had been especially strong the past few months but has taken the backseat recently as funds allocate more to infrastructure. 

Four crypto funds were raised this week: North Island Ventures, Northzone, Two Sigma Ventures, and Valkyrie’s Tron & Avalanche Trust. The largest of these raises was London-based Northzone, which raised $1.01 billion to invest in early-stage Web3 projects.

An interesting partnership this week, was investment giant KKR, teaming up with Avalanche to tokenize their Health Care Strategic Growth Fund II (HCSG II) on the Avalanche blockchain. KKR will tokenize this fund with the help of digital asset management company Securitize Capital. The tokenization will enable investors to own a token representing a share of the $4 billion healthcare-focused fund that invests in 23 North American and European companies in the pharmaceuticals, medical devices, and life sciences sectors. 

The bulk of deals remains in the early stages, with 50% of deals this week being Seed Round and 16.7% being Series A. 

Deal of The Week:

Magna, a token management platform, has raised $15 million in a seed round valuing the company at $70 million. Tiger Global and Tusk Venture Partners led the investment. Other investors include Circle Ventures, Solana Ventures, Polygon Ventures, and Shima Capital. Magna is looking to help protocols by offering “Token distribution on autopilot.” Magna’s software will provide protocols with custom vesting schedules, branded claim portals, employee and investor dashboards, multi-sig support, tax withholding, compliance, and custodian integrations. 

Why is This Deal of the Week?

Compared to Web2, the infrastructure surrounding Web3 companies is still very scarce, making it more difficult for companies to scale. Whether it is airdrops, vesting schedules, or just sending proper token allocations to the correct wallets at the right time, crypto organizations struggle with token management. Token issuance is becoming the standard for crypto companies. As more and more companies dive into tokenization, they will be looking for a partner to help them along their journey. Magna can fill that role with its battle-tested token management software. Magna’s pre-launch management software will allow crypto companies to manage their legal agreements, such as SAFTs, token warrants, and token grants, and then communicate the value of their token to investors. Then through live token distribution, companies will be able to maintain compliance, track transactions, and automate tax withholdings, creating the perfect token operations system. Magna is live on Solana, Ethereum, multiple L2 networks, and will launch on Aptos later this year. 

Selected Deals

Doodles is a Web3-based entertainment and media platform aiming to fast-track the mainstream adoption of non-fungible tokens (NFTs). The platform’s first NFT collection (Doodles) was released in October 2021 and it has announced plans for a second NFT project (Doodles 2). The company has secured $54M in funding at a $704M valuation through its Series A round led by Seven Seven Six. The funding round also included investor participation from FTX Ventures, Acrew Capital, and 10T Holdings. Doodles intends to use the capital raised for future acquisitions, workforce expansion, and product development. 

Portofino Technologies is an infrastructure-based platform aiming to scale its proprietary high-frequency trading technology. The platform plans to achieve this by continuing to service institutional clients by providing liquidity on both centralized and decentralized crypto exchanges. The company has secured $50M in funding with investor participation from Coatue, Valar Ventures, and Global Founders Capital. 

Reku is an Indonesia-based centralized cryptocurrency exchange aiming to provide users with effective market guidance and security. Also, the platform offers the lowest transaction fees for the Indonesian market. The company has secured $11M in funding through its Series A round led by AC Ventures. In addition, the funding round included investor participation from Coinbase Ventures and Skystar Capital. Reku intends to use the capital raised to expand its workforce. 

Arpeggi Labs is a Web3-based platform aiming to increase collaboration among music creators by utilizing blockchain technology. The platform plans to achieve this by building a free in-browser digital audio workstation (DAW) and protocol. The company has secured $5.1M in funding through its seed round led by Andreessen Horowitz (a16z) Crypto. In addition, the funding round included investor participation from 1confirmation, Palm Tree Crew, Steve Aoki, Wyclef Jean, and others. 

Synquote is a DeFi-based platform that provides users access to crypto options on decentralized exchanges (DEX). The platform plans to achieve this by sourcing quotes and pricing from institutional market makers. The company has secured $2.8M in funding through its seed round led by Initialized Capital. The funding round also included investor participation from Coinbase Ventures, Polygon, CMT Digital, AllianceDAO, and others. Synquote intends to use the capital raised to expand its workforce.