Crypto startups lead the charge in February’s $485m VC boom

Venture capital firms have shown a growing interest in cryptocurrency startups, with February witnessing a significant uptick in investments.

CryptoBriefing, citing data from DefiLlama, reported that crypto startups received $485 million in funding last month, marking a 5.3% increase from the previous month and the highest investment volume in the last quarter.

A substantial portion of the capital, amounting to $387 million, was allocated to infrastructure-related startups. The most notable investment was made by a16z, which injected $100 million into EigenLayer during a private funding round. This was the largest venture capital allocation to a crypto startup in February.

EtherFi, a liquid staking platform, also secured a noteworthy investment of $27 million in a series A round. The round was spearheaded by Bullish and CoinFund.

Additionally, the payments platform Oobit concluded a successful series A funding round, receiving $25 million. This round was led by Tether and CMCC Global.

Decentralized finance (DeFi) projects attracted over $48 million in investments during the same period. Superform Labs, aiming to develop a universal yield marketplace, garnered $6.5 million in a seed round led by Polychain Capital.

Omega’s initiative to create a DeFi ecosystem on top of Bitcoin received $6 million in a private round, with contributions from Borderless Capital and Blockchain.com.

Web3-focused applications also drew investor interest, securing almost $18 million in February. Beoble, working on a web3 messaging app and social platform, received the largest investment in this sector, with $7 million from entities including Samsung Next and Hashkey Capital.

The gaming sector was not left behind, with $33 million directed towards new game studios. Helika, a gaming studio, raised $8 million in a series A round led by Pantera Capital. Another significant investment was in the web3 game Pixelmon, which attracted $8 million from Animoca Ventures and Delphi Ventures.

Earlier in September, Colleen Sullivan, from Brevan Howard Asset Management’s crypto-venture arm, acknowledged the potential of blockchain technology in gaming.

However, she also pointed out the current limitations, particularly the throughput issues on networks like Solana, which can only handle approximately 2,000 transactions per second. This capacity is deemed insufficient for hosting high-quality gaming experiences on-chain, according to Sullivan.

Despite the robust activity in February, a broader perspective from PitchBook data in October indicates a slowdown in crypto market investments.

In the third quarter of 2023, venture capitalists invested $2 billion in crypto, representing a 63% decrease from the same period in 2022. This decline in funding levels is attributed to a reduction in the size of deals, as noted by PitchBook analyst Robert Le.

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