Q1 2023 Crypto Fundraising Report
Executive Summary
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- Crypto VC funding has continued its downtrend since peaking in the beginning of last year. Q1 2023 marked the fourth consecutive quarter of declines in total fundraising amount and deal count.
- Despite its decline from peak funding levels, the industry has proved its resilience, with funding levels still greater than 4x that of the previous bear market. We will be watching to see if the March U.S. banking crisis will have delayed adverse effects on the private market.
- Deals have been smaller and concentrated in the early stages, as there are likely fewer winners worth doubling down on at lofty valuations. Only 7% of deals were over $25 million, while 69% fell under $10 million.
- Similar to 2022, Infrastructure was the most heavily invested vertical, raising over $1 billion in Q1 as the proper rails are still needed for crypto to scale aggressively. Other trends include an increased appetite for companies providing data analytics, software, and cybersecurity services.
- Bottom Line – Despite a tumultuous macroeconomic environment and industry-specific risks, the crypto venture market has sustained private investor interest and should improve as market headwinds dissipate.
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