The evaporating funding means “a lot of companies are doing their down rounds,” said the founder of Delta Blockchain Fund.
Venture capital funding for crypto projects has fallen sharply in recent months. According to a Crunchbase report, venture capital funding for crypto projects in Q1 2023 was $1.7 billion, down 82% from $9.1 billion in Q1 2022.
There are a number of factors that could be contributing to this decline, including the recent bear market in cryptocurrencies, increased regulatory scrutiny of crypto, and concerns about the environmental impact of crypto mining.
Some of the companies that raised significant funding in 2022 include:
- Yuga Labs: The creator of the Bored Ape Yacht Club NFT collection raised $450 million from Andreessen Horowitz in April 2022.
- ConsenSys: The blockchain technology company behind the Ethereum wallet MetaMask raised $450 million from ParaFi Capital in March 2022.
- Polygon: The Layer-2 scaling solution for Ethereum raised $450 million from Sequoia Capital, Tiger Global, and SoftBank in February 2022.
- FTX: The cryptocurrency exchange raised $400 million from SoftBank in January 2022.
- FTX US: The US subsidiary of the cryptocurrency exchange raised $400 million from Temasek Holdings in January 2022.
These funding rounds are a sign of the growing interest in the crypto industry and the potential of blockchain technology.