Crypto Startups Attract $2.7 Billion in Q2 Despite Decline in Deal Volume

In the second quarter of 2024, crypto startups managed to attract $2.7 billion in funding across 503 deals, marking a slight increase in capital raised despite a noticeable decline in deal volume.

According to a report by PitchBook, this represents a 2.5% rise in total investment compared to the previous quarter, although the number of deals decreased by 12.5%.

The report said that while fewer deals were made, the value of each deal was generally higher.

Crypto Investments Likely to Grow

PitchBook analysts noted that as investor sentiment towards crypto continues to improve, and assuming no major market disruptions, the pace and volume of investments are likely to grow throughout the rest of the year.

This positive outlook reflects a cautious but optimistic return of confidence among investors in the crypto space.

Infrastructure startups led the funding race during Q2, with significant rounds raised by Monad, a parallelization Layer 1 platform, which secured $225 million in Series A funding.

DeFi-specific Layer 1 platform Berachain followed with a $100 million Series B round, and bitcoin restaking platform Babylon raised $70 million in an early-stage round.

These substantial investments underscore the growing importance of infrastructure development in the crypto industry.

Two other notable funding rounds included a $150 million Series A round for Farcaster, a platform that achieved a post-money valuation of $1 billion, and a $140 million early-stage round for the blockchain-based gaming platform Zentry.

The report also revealed that valuations have increased for seed and early-stage investments compared to 2023, with the median pre-money valuation reaching $23 million at the seed stage and $63.8 million at the early stage.

However, late-stage valuations saw a decline, with the median figure dropping to $40.8 million.

The shift in valuation trends reflects a highly competitive environment for early-stage investments, while late-stage deals appear to be less intense.

Crypto Startup Funding Surpasses $100 Billion

Crypto startups have experienced a significant surge in funding over the past decade, surpassing the impressive milestone of $100 billion since May 2014.

The peak of cryptocurrency startup funding was reached in October 2021, with over $7 billion raised during that month.

The second-highest recorded funding occurred in February 2022, totaling $3.67 billion.

Recent research indicates that nearly half of all cryptocurrency funding originates from investors in the United States.

The remaining investments are distributed among various countries, with the United Kingdom accounting for 7.7% and Singapore for 5.7%, based on figures from the second quarter of 2023.

Notably, a series of high-profile funding deals have taken place between late 2023 and the first half of 2024.

Together.AI and cross-chain protocol Wormhole secured investments of $225 million each, while open-source cloud storage firm Totter and Eigenlayer raised $101 million and $100 million, respectively.

Other notable funding rounds include Swan Bitcoin’s $165 million raise and Blockchain.com’s $110 million.

These substantial investments highlight the continued confidence and interest in the cryptocurrency industry.

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