Web3 VC Funding: Crunchbase Data Shows 76% Drop
• Funding of Web3 firms from venture capitalists has dropped 76% in the second quarter this year as compared to the same quarter in 2022, according to Crunchbase data.
• US-based startups led in the number of deals completed and the amount of money raised this year, accounting for 45 percent of all crypto VC funding.
• AI-based startups secured $25 billion in funding in the first half of 2023 while Crypto startups failed to generate interest among venture capital firms.
Overview
Funding of Web3 firms from venture capitalists has dropped 76% in the second quarter this year as compared to the same quarter in 2022, Crunchbase data revealed. Web3 firms raised just over $1.8 billion in the second quarter of 2023 as compared to $7.5 billion during the same period last year. In the first half of 2023, Web3 startups raised $3.3 billion, a 78% drop from $16 billion in the first half of 2022. Only $720 million was raised by ten new crypto venture capital (VC) funds in the second quarter of this year.
Geographical Distribution
The United States-based Web3 startups led in the number of deals completed and the amount of money raised this year. US-based companies accounted for 45 percent of all crypto VC funding in Q2 2023, followed by the UK with 7.7 percent, Singapore with 5.7 percent, and South Korea with 5.4 percent. US-based companies also took lead when it comes to deals completed with 43 percent followed by Singapore and UK with 7.5 percent each and South Korea with 3.1 percent respectively.
Sector Breakdown
The Crunchbase report also mentioned sectors within web 3 industry that attracted most venture capitals such as Trading, Exchange Investing & Lending Crypto based Startups which have managed to raise highest amount i..e $473 million that accounts for 20 %of deployed capitals whereas other sectors like web 3 , NFTs , Gaming , DAOs & Metaverse Startups were able to raise only$442 million which accounts for 19 %of all Venture Capitals invested during Second Quarter . Crypto Protocol LayerZero leads from front after raising whooping sum$120 Million backed up by Andreessen Horowitz (a16z) , Christie’s & others earlier this year .
AI vs Crypto Startups
While Crypto Startups failed miserably at generating interests among Venture Capital Firms Artificial Intelligence Based Staruos witnessed exponential growth & managed to secure whopping sum$25 Billion In Funding during First Half Of Year 2023 OpenAI CEO Sam Altman’s Crypto Project Worldcoin Raised Whooping Sum$115 Million Through Series C Round Led By Blockchain Capital In May 2023 . The Controversial project Integrates AI And Cryptocurrency To Provide People With Global Entity .