The report on crypto venture capital investments in the first quarter of 2023 shows mixed valuation trends, with seed rounds experiencing a 33.3% increase and late-stage rounds witnessing a significant surge of 209.2% compared to the previous year. However, early-stage rounds have seen a decline of 16.7%.
While the crypto space suffers through a bear market, venture capital (VC) firms are still making deals in 2023, demonstrating that the space is alive and well despite the “crypto winter.”
According to PitchBook’s Crypto Report for the first quarter of 2023, crypto companies raised $2.6 billion across 353 investment rounds. While it shows the space is still active, it’s evident that it’s not as strong as it used to be.
According to the report, there was an 11% decrease in quarter-on-quarter deal value and a 12.2% decrease in the total number of deals. Furthermore, the quarter also saw the lowest amount of capital invested in the crypto space since 2020.
The report highlights mixed valuation trends, with seed rounds experiencing a 33.3% increase and late-stage rounds seeing a significant growth of 209.2% compared to the entirety of 2022. However, early-stage rounds have declined by 16.7% during the quarter.
Despite the noted decline in deal value and total deals, the report also identifies positive outlooks for the crypto space. One area of promise is the continued momentum of layer-2 scaling solutions, as demonstrated by notable funding rounds in the sector. For instance, Blockstream secured $125 million in financing for its Bitcoin mining infrastructure, indicating continued interest in supporting the underlying infrastructure of cryptocurrencies. Additionally, Scroll, a company focused on developing a zero-knowledge Ethereum Virtual Machine scaling solution, raised $50 million in a late-stage venture capital round. These investments highlight the ongoing interest in innovative scaling solutions within the crypto ecosystem, suggesting potential growth and advancements in the coming months.