Web3 startups raised about $1.8 billion in venture capital funding in the second quarter, down 76% year-over-year. This is evidenced by Crunchbase data.
The total number of transactions also fell by 51%, from 659 to 322, the lowest level since the end of 2020.
Experts have identified three major transactions in the second quarter:
- the Swiss Islamic Coin project raised $200 million led by ABO Digital;
- LayerZero omnichain protocol closes $120 million funding round led by Sequoia;
- Sam Altman’s startup Worldcoin has raised $115 million led by Blockchain Capital.
In the first six months of 2023, projects received funding for only $3.6 billion. Last year, the volume of venture capital transactions for the same period reached $16 billion.
According to analysts, the decline is due to the departure of large investors in the artificial intelligence sector, which raised $25 billion in the first half of this year.
“We may have found the bottom of the market for investor interest in Web3,” suggested Crunchbase.
The company also noted that the reduction in venture funding occurred against the background of the growth of bitcoin and other cryptocurrencies. However, according to analysts, the current market is different from the bullish phase of 2021, when “every startup in the world had money.”
As a reminder, in June 2023, Binance’s venture division invested in five “highest-performing projects” as part of the fifth season of its incubation program.
In July, the Web3 music project Sound raised $20 million in a Series A funding round led by the crypto arm of venture capital fund a16z.
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