Funding for crypto companies reached an 18-month high in March, thanks to a flood of early-stage investments in blockchain-related ventures.
New funding for crypto companies has totaled more than $1.4 billion, according to The Block Deals Dashboard. This makes March the sector's best month since September 2022, when it attracted more than $2 billion in funding.
John D'Antoni, director of research at The Block, said March was a strong month due to a surge in early-stage, or Series A, investing. D'Antoni said the number of early-stage investments for the month was more than 20, a significant increase from February, when there were nine investments, and in line with the monthly average over the past year.
The increase in funding for the sector has coincided with an increase in prices. Bitcoin, which started rising rapidly in early February, topped $70,000 for the first time this month.
“Some wondered why, despite the strong price performance of digital assets, a similar resurgence in venture funding had not emerged. This question was valid, but it was related to the timing of deal announcements. It stemmed from a misunderstanding,” D'Antoni said. “In practice, most trades are not disclosed immediately after they occur, creating a natural lag between trading activity and price performance. It often takes even longer to complete.”
“There's more money on the table.”
David Garcia, co-founder and managing partner of Borderless Capital, recently offered a relatively frank assessment of the reasons for the increase in new deals. “There's more money on the table,” he said. It was announced this week that Borderless Capital co-led his $15 million investment in DePIN layer 1 blockchain project Peak.
D'Antoni said this month's increase means more than a high number. “March is the most reliable indicator of the strength of VC activity in the market,” he said. “Notably, deal activity has increased consistently for the third month in a row, and venture funding has surged approximately 64% month-over-month.”
March token sales brought in some of the highest amounts of the month. According to The Block Deals Dashboard, Monad Labs and Optimism, both categorized as “infrastructure” deals, raised $213 million and $89 million, respectively, through token deals.
Total investment in virtual currency and blockchain-related companies reached a major milestone last month, exceeding $90 billion. Block Research has been tracking crypto investments since 2017.
More money is likely to flow into crypto projects through venture capitalists in the coming months. For example, on Thursday it was revealed that Marc Andreessen, Accolade Partners, and Galaxy Digital invested in crypto VC firm 1kx's latest fund, raising $75 million. 1kx focuses on consumer-targeted crypto applications and has less than 6 investments in its latest funds including Kiln, Pudgy Penguins, Rarible, and The Sandbox.
Disclaimer: The Block is an independent media outlet that delivers news, research and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block continues to operate independently to provide objective, impactful, and timely information about the cryptocurrency industry. Current financial disclosure information is as follows:
© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
