In the past week, many Web 3.0 projects have raised hundreds of millions of dollars. This has led to talk that venture capital (VC) firms are putting most of their money into this sector while the crypto winter continues.
One of Asia’s biggest blockchain gaming companies, Animoca Brands, has raised $100 million from Singapore’s state-owned Temasek. This comes just seven months after the company raised $360 million in January.
A filing with the Securities and Exchange Commission (SEC) says that former executives of Galaxy Digital and Genesis want to raise $500 million for a crypto fund called DBA Crypto.
Alexis Ohanian, who helped start Reddit, is almost done getting his venture capital firm, Seven Seven Six (776), ready to fund $177.6 million worth of crypto investments in October.
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A few days earlier, the big investment management company Invesco announced the launch of its Metaverse Fund, which will invest in small, medium, and large-cap Web 3.0 companies around the world.
Polygon’s (MATIC) co-founder, Symbolic Capital, raised $50 million from venture capitalists for a new fund that will focus on Web 3.0 startups from emerging markets in their early stages. The news comes after a crypto investment firm called CoinFund and a new company called Shima Capital each raised $500 million for young Web 3.0 projects.
Most funding deals are in the Web 3.0 sector.
Even though venture capital investments have slowed down in general, the sector seems to be booming because of the large amount of funding. So far this year, nearly $16 billion in venture capital funding has gone into the crypto space as a whole. This is almost half of the record-breaking $32.8 billion that was invested last year, when the amount was up more than six times from 2020.
Nearly 1200 funding deals were made in the first half of the year, according to a report by crypto market intelligence firm Messari and crypto fundraising database Dove Metrics.
Based on the information they had, the Web 3.0 and NFT sectors did the most deals (530) in the first half of 2022. Compared to the Infrastructure (252 deals), Centralized Finance (222 deals), and Decentralized Finance sectors, this is twice as many (195 deals).
Centralized finance (CeFi) and infrastructure, on the other hand, seemed to be the winners in terms of how much money was raised. Both fields got funding of $10.2 billion and $9.7 billion, respectively.
Web 30 and NFTs stayed in third place with $8.6 billion, while DeFi was completely left behind with $1.8 billion.
When compared to the other sectors, CeFi attracted the most investments. Based on the data, the average amount of CeFi funding was $45.9 million, and the average investment in infrastructure projects stayed at $38.5 million.
Even though the NFT sector has been the most interesting to venture capitalists in the first half of the year, Web 3.0 and the NFT sector averaged $16.2 million per deal. The least amount of money was invested on average in DEFI, which had deals worth $9.2 million.
What makes investors feel good?
Web 3.0, also called the decentralised Web, is the third generation of the internet. It includes decentralised ledger technology, artificial intelligence, and machine learning. It is hoped that it will make the user experience more open to everyone, increase transparency, and give users more control over their data.
Venture capital firms are also interested in how digital technologies are changing and how worries about data security are growing. They are also interested in how cryptocurrencies and non-fungible tokens (NFTs) are still being used around the world.
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“We think Web3 is about to enter its golden age right now.” Blockchains that can be programmed are now far enough along that a wide range of apps have reached tens of millions of users. More importantly, there has been a huge influx of world-class talent into Web3 over the past year, says Andreessen Horowitz, a venture capital firm that raised $4.5 billion for its Crypto Fund 4 in May 2022.
The other side
Even though there are more investments in the Web 3.0 and metaverse space, it faces problems like a growing number of cyberattacks, worries about security, and a lack of rules.
Why should you care?
The global Web 3.0 market is expected to grow by $81.5 billion by 2030. This is because people want better user experiences, and connectivity is getting better and better.
Find out more about the Web 3.0 projects that are making news right now:
Watch out for these 10 metaverses in 2022.
Find out more about plans for investing in crypto with venture capital:
Katie Haun, a former partner at A16Z, has raised $1.5 billion for two new cryptocurrency venture funds.
