Crypto Venture Capital Funding Topped $2.4bn For Q1

Crypto startup funding rose for a second consecutive quarter to total $2.4 billion in the first three months of 2024, PitchBook data showed.

Expectations of lower interest rates and the debut of the first US bitcoin spot ETF whetted investor appetite for digital currencies.

Funding was spread across 518 deals and rose by 40.3% from the previous quarter, according to data firm PitchBook. Global venture capital investments dropped to a near five-year low in the same period.

Investor bets on digital asset startups too had been on a slide since the peak of over $10 billion in the first quarter of 2022, hurt by a economic worries and the shutdown of key market players.

However, the landmark US regulatory approval of spot bitcoin ETFs, which are offered by heavyweights BlackRock and Fidelity, boosted the legitimacy of the asset class and helped send bitcoin to a record high of $73,803 in March.

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“The recovery in publicly traded tokens and continued rise in institutional adoption will drive increased VC funding,” PitchBook analyst Robert Le said.

Startups focused on building infrastructure for crypto and blockchain technology led the way in funding during the quarter, according to PitchBook.

The largest deal was made by decentralised cloud platform Together AI, which raised $106 million in an early stage round led by Salesforce Ventures that valued the company at $1.1 billion.

“The investment rounds have become highly competitive, especially at the early stages,” PitchBook’s Le said.

“This is compounded by the fact that early-stage deals are earning higher valuations than late-stage deals but.. we will see if this trend holds in the coming quarters.”

Exits were still low, though. Le expects mergers to pick up later this year, particularly among crypto exchanges, custodians and infrastructure providers as the market matures.

Reuters with additional editing by Sean O’Meara

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Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.