The web3 sector witnessed a significant surge in venture capital investments during the first quarter of 2024 compared to the preceding time frame in 2023, according to new data from Crunchbase.
In a recent report, Crunchbase noted that this was the first notable uptick in investments in the sector since 2021. Startups in the web3 space raised about $1.9 billion from 346 deals during the first quarter of the year, according to the data presented in the report. This figure represents a remarkable 58% rise from the previous year’s fourth quarter, where the web3 sector garnered nearly $1.2 billion from 263 funding rounds.
However, the report noted that this increased investor activity in 2024 Q1 was 17% below that of 2023’s first quarter, where startups acquired precisely $2.3 billion from over 670 deals. Additionally, the current deal count is experiencing a 48% decline compared to the previous year’s figure.
The top three funding rounds for the quarter amounted to less than $300 million each. Notable among these is Exohood Labs, a London-based firm specializing in AI, blockchain, and quantum computing, which secured a staggering $112 million seed round, valuing its AI project at $1.4 billion. EigenLabs, a US-based developer of EigenLayer for staking and restaking Ethereum, followed closely with a $100 million Series B funding from the a16z cryptocurrency project. Hong Kong-based Freechat also secured significant funding, raising $80 million in a Series A round for its super apps project built on Web3 social networks.
The report highlights that investor retreat from the sector commenced in 2022, following significant setbacks such as the FTX collapse saga and increased regulatory crackdowns. These challenges heavily impacted the Web3 ecosystem, leading many investors to exit the industry in favor of more stable and profitable sectors.
READ MORE: Valuable Lessons From the SBF-FTX Case for the Cryptocurrency Industry
The report highlighted that investor retreat from the sector began in 2022, following significant setbacks such as the FTX collapse saga and increased regulatory crackdowns. These challenges heavily impacted the Web3 ecosystem, leading many investors to exit the industry in favour of more “stable” and “profitable” sectors.
Crunchbase’s findings align with another report by QuickNode and Artemis, which also noted increased investor activity in the web3 sector in 2024 Q1. Both reports indicated that this increased activity signals a strategic shift and growing confidence in the sector’s potential to drive meaningful societal impact.
Disclaimer: This piece is intended solely for informational purposes and should not be considered trading or investment advice. Nothing herein should be construed as financial, legal, or tax advice. Trading or investing in cryptocurrencies carries a considerable risk of financial loss. Always conduct due diligence.
If you want to read more news articles like this, visit DeFi Planet and follow us on Twitter, LinkedIn, Facebook, Instagram, and CoinMarketCap Community.
“Take control of your crypto portfolio with MARKETS PRO, DeFi Planet’s suite of analytics tools.”
