Crypto VCs strike deals in Q1 of 2023

Despite the “crypto winter,” venture capital (VC) firms are still striking deals in the crypto space in 2023, demonstrating that the industry is thriving despite the bear market.

According to the PitchBook Crypto Report for the first quarter of 2023, crypto companies raised $2.6 billion across 353 funding transactions.

Although it demonstrates that the space is still active, it is evident that it is not as robust as it once was.

The report revealed an 11% quarterly decline in deal value and a 12.2% quarterly decline in total transactions. Additionally, the quarter marked the lowest level of capital investment in the sector since 2020.

In addition, the report noted that valuation trends have been inconsistent. Comparing the first three months of 2022 to the entire year, seed rounds are up 33.3%, and late-stage rounds are up 209%.

However, early-stage funding has decreased by 16.7%.

While the report acknowledges that the decline may persist, it also identifies several optimistic prospects for the sector.

The data indicate that layer-2 scalability solutions will maintain their momentum through 2022.

According to the report, Blockstream raised $125 million to finance a Bitcoin mining infrastructure, and Scroll, a company developing a scaling solution for the Ethereum Virtual Machine with zero knowledge, raised $50 million in a late-stage VC round.

In addition to scaling solutions, Ledger and Taurus, purveyors of custody solutions, received substantial investments in 2023.

Ledger raised $109 million on March 30 as the demand for self-custody skyrocketed. On February 14, Taurus raised $65 million in Series B funding.