Funding Activity Slows in Last Week of Summer
Weekly Recap
In the final week of summer, crypto funding activity diminished. Total weekly funding fell to $16 million from $24 million the previous week. Deal count fell 25% to just 9 deals. Of the nine deals, both DeFi and Web3 & NFTs notched four deals. The Web3 & NFTs deals were slightly larger, totaling $9 million in investment compared to DeFi’s $5 million. A noticeable trend in the last month has been the popularity of deals in the Web3 space as blockchain-oriented social media sites like Friend.tech have taken the spotlight.
To no surprise, Seed rounds were the investment choice for venture capitalists. Nearly half the deals this week were Seed investments, totaling almost 70% of the total funding amount. There was one Pre-Seed round by Tako Protocol, raising $2 million. Tako Protocol is building an open social recommendation layer to recommend, advertise, and curate on Web3 Social. It will be interesting to see if funding activity picks up after Labor Day and finishes the year on a strong note.
Funding by Category
Funding by Deal Stage
Deal of the Week
Stroom Network, a bitcoin liquid staking protocol, raised $3.5 million in an oversubscribed Seed round led by Greenfield. Other investors included Mission Street, Lemniscap, No Limit Holdings, and Cogitent Ventures, among others. Stroom Network is striving to replicate the mechanics of Ethereum liquid staking to allow bitcoin holders to deposit tokens with Stroom and receive a liquid staking token (similar to wBTC) which is EVM compatible, allowing holders to leverage their capital and pursue other yield opportunities on Ethereum. Stroom plans to use the funds expand its team and accelerate the launch of its liquid staking token (LST).
Why Is This Deal of the Week?
One of the major pain points of the Lightning Network is a lack of liquidity, hindering the adoption of the payments network. Stroom is hoping to alleviate Lightning’s problem by sourcing dormant bitcoin liquidity and utilizing liquid staking mechanics. When users stake their bitcoin with Stroom, they will begin earning Lightning Network routing fees while having the optionality to pursue other yield opportunities across blockchains with Stroom’s LST (lnBTC). Stroom’s utility is two-fold: increased liquidity for the Lightning Network, and additional yield and composability for bitcoin holders. Reducing the technical expertise of running a Lightning node should make Stroom a popular choice for bitcoin holders looking to earn extra yield or leverage their holdings across DeFi. Payments remains a relatively untapped sector in crypto and Stroom hopes to be the key to unlock the Lightning Network’s potential.
Selected Deals
Web3 marketing firm DeForm, raised $4.6 million in a Seed round led by Kindred Ventures. Other investor participation included Elad Gil, Scalar Capital, and others. Marketers can gain useful insights about their customers from analyzing blockchain data. DeForm is serving those insights on a via their suite of Web3 data and survey creation tools. DeForm plans to use the funds to expand its team and improve upon its cross-chain analytics, as verifying customer behavior across various networks can sometimes be tedious or cumbersome.
FirstMate, a company hoping to provide NFT creators with personalized digital marketplaces, raised $3.75 million in an undisclosed round led by Dragonfly Capital. Other investors included Coinbase Ventures and NextView. FirstMate envisions a future in which NFT creators can easily create their own websites displaying their work and aggregating price data from various NFT exchanges. FirstMate will offer creators the tools to seamlessly create custom digital marketplaces with no coding required. FirstMate has already helped Bankless, Sound, FELT Zine, and others build personalized marketplaces.
ProsperEx, a decentralized exchange combining on-chain derivatives and real-world asset (RWA) trading, raised an undisclosed amount in a Strategic round with EMURGO Ventures. EMURGO is a prominent name in the Cardano ecosystem and serves as a marquee investment for ProsperEx and brings a sense of credibility to the project. ProsperEx hopes to capitalize on the growth of on-chain derivatives and serve as the gateway to safe and efficient trading.
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