Crunchbase: Web3 startup Q1 raised $1.7 billion in venture capital, a decrease of 82% year-on-year

ChainCatcher news, according to Crunchbase data, venture capital investment in Web3 startups fell by 82% year-on-year in the first quarter of this year, dropping from $9.1 billion in the first quarter of 2022 to $1.7 billion. This marks the lowest level of Web3 funding since $1.1 billion in the fourth quarter of 2020, when "many people had never heard of Web3." In this context, Web3 startups are defined as early companies that work directly with cryptocurrency or blockchain technology (or both).

Additionally, the total number of deals between venture capital and Web3 startups has also seen a significant decline, with 333 deals recorded in the first quarter of 2023, a decrease of about 33% year-on-year. The report also highlights that in the first quarter of 2022, venture-backed startups raised 29 rounds of funding exceeding $100 million. This included large-scale funding of $400 million or more for ConsenSys and Polygon Technology, as well as FTX and its U.S. subsidiary FTX US. In the most recent quarter, only two rounds of funding reached nine figures, as venture capital firms have halted large investments in this sector.

The report notes that recent interest in Web3 startups has cooled, but it also emphasizes that venture capital is decreasing across almost every sector. Crunchbase attributes the decline in Web3 funding to investors opting for a risk-averse approach in recent months, with venture capital seeking opportunities in industries they know best—such as cybersecurity or SaaS—rather than in the promise of the next generation of the internet (Web3). (source link)