Venture capital firms are increasingly showing interest in cryptocurrency startups, as evidenced by a surge in investments during February. According to data from DefiLlama reported by CryptoBriefing, cryptocurrency startups secured 5 million in funding last month, marking a 5.3% increase from the previous month and the highest investment volume in the last quarter.
Infrastructure-related startups received a significant portion of this capital, with 7 million allocated to them. One notable investment came from a16z, as they injected 0 million into EigenLayer during a private funding round, making it the largest venture capital allocation to a crypto startup in February.
EtherFi, a liquid staking platform, also saw a significant investment of million in a series A round led by Bullish and CoinFund. Additionally, the payments platform Oobit successfully concluded a series A funding round, securing million with the support of Tether and CMCC Global.
During the same period, decentralized finance (DeFi) projects attracted over million in investments. For instance, Superform Labs, aiming to develop a universal yield marketplace, received .5 million in a seed round led by Polychain Capital. Omega’s initiative to create a DeFi ecosystem on top of Bitcoin also received million in a private round.
Web3-focused applications garnered almost million in investments in February. Beoble, which is working on a web3 messaging app and social platform, received the largest investment in this sector with million from entities including Samsung Next and Hashkey Capital.
The gaming sector also received attention, with million directed towards new game studios. Helika, a gaming studio, raised million in a series A round led by Pantera Capital. Additionally, the web3 game Pixelmon attracted million from Animoca Ventures and Delphi Ventures.
Colleen Sullivan from Brevan Howard Asset Management’s crypto-venture arm acknowledged the potential of blockchain technology in gaming but highlighted current limitations, such as network throughput issues on platforms like Solana.
Despite the stellar activity in February, PitchBook data from October paints a different picture, indicating a slowdown in crypto market investments. In the third quarter of 2023, venture capitalists invested billion in crypto, marking a 63% decrease from the same period in 2022. This decline is attributed to a reduction in deal sizes, as pointed out by PitchBook analyst Robert Le.
