In the midst of the bear market, Web3 startups raised $7.1 billion

Despite the unprecedented crisis in the crypto market, Web3 startups raised more funds last year than in 2021.

In 2022, Web3 startups have attracted some of the most high-profile venture capitalists on the planet, including investment banks like Morgan Stanley and Goldman Sachs. Most fundraising has been led by crypto investment funds like Binance Labs, Coinbase Ventures, and Kraken Ventures.

Source : Wholesale Investor

While the bear market was in full swing, 348 Web3 startups raised a total of $7.16 billion in 2022. According to a report by the magazine Metaverse Postthis figure is almost double the amount raised in 2021.

The startups that have attracted investors belong to several fields of activity, including gaming, metaversesocial networks, virtual reality and artificial intelligence. Likewise, several sub-sectors of the crypto market have successfully attracted capital in 2022.

In the second quarter of 2022, metaverse projects and games raised several million dollars. “Then venture capitalists became interested in play-to-earn gamespaying particular attention to blockchain casinos, collectibles, loot boxes, and football-related games,” noted The report.

Artificial intelligence, a sector that makes investors dream

During the last quarter of 2022, investors turned their attention to Web3 startups specializing in augmented, virtual and mixed reality. The apps artificial intelligence, such as the ChatGPT robot, have also attracted a lot of interest from venture capitalists.

For example, InworldAI raised $50 million in a Series A funding round, while SEED raised $41 million. Similarly, SingularityDAO and MarqVision raised $25M and $20M respectively in their funding rounds.

“Venture capitalists are unlikely to lose interest in artificial intelligence (AI) in 2023. More AI startups are expected to secure funding,” the report reads. Metaverse Post.

Likewise, given the surge in hacks and crypto scams, investors are focusing more on the security of the crypto ecosystem. Consequently, the total investments received by Web3 startups specializing in blockchain infrastructure increased sharply in 2021.

1673170760 96 In the midst of the bear market Web3 startups raised
Source : Metaverse Post

These Web3 startups that have seduced investors

Topping the list is video game studio Epic Games, which raised $2 billion from Sony and KIRKBI. Epic Games intends to use these funds to “achieve its vision for the metaverse and sustain its growth”. Currently, the company is valued at $31.50 billion.

Funding raised by Web3 startups
Source : Metaverse Post

Next, Yuga Labs, the parent company of Bored Ape Yacht Club (BAYC), has raised over $400 million to develop its Otherside metaverse. Given the dazzling success of its NFT collection, Yuga Labs is now one of the most sought-after Web3 startups by investors.

Animoca Brands, a metaverse-focused startup, is also in the top 3. It is followed by Immutable, a platform Layer 2 based in Sydney. According to Metaverse Postmost of the investments come from four venture capitalists.

Who are the biggest crypto backers?

Paradigm, a San Francisco-based investment firm, has become the most active investor in the Web3 world. In 2022, the company spread a $2.50 billion envelope across 31 crypto projects, including Coinbase, Uniswap, magic eden and Optimism.

1673170761 257 In the midst of the bear market Web3 startups raised
Source : Metaverse Post

With a total investment of $2.20 billion, Andreessen Horowitz (a16z) has become the second most active venture capitalist after Paradigm. The fund is followed by HiveMind Capital Partners which has invested $1.5 billion in Web3 startups. Finally, Binance Labs came in at #4 with a total investment of $1 billion.

While profitability is there, losses are also part of the game. For example, hedge fund failure Three Arrows Capital (3AC) has been worth several million dollars to its investors. Without forgetting the collapse of FTX which rippled through the entire crypto market.

While venture capitalists have the means to make up for their losses, the average investor has only his eyes to cry. Hence the need to carefully study the projects in which we invest.

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In the midst of the bear market, Web3 startups raised $7.1 billion


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