Research Summary
The report provides an in-depth analysis of the crypto industry’s fundraising data for Q3 2023. It highlights a multi-quarter downtrend in funding amounts and deal counts, with a shift towards early-stage projects and strategic investments. The report also examines sector trends, with chain infrastructure, DeFi, and gaming sectors attracting the most funding. It further discusses the role of investors, with Binance Labs emerging as the most active.
Key Takeaways
Fundraising Downtrend
- Overall Funding Decline: The report indicates a significant decline in overall funding amounts and deal counts in Q3 2023, marking new lows not seen since Q4 2020.
- Shift to Early-Stage Projects: There has been a noticeable shift towards early-stage projects, with seed funding accounting for the largest stage total.
- Strategic Investments: The harsh market conditions have led to an increase in strategic investments, with a notable $200 million investment into Islamic Coin.
Sector Trends
- Leading Sectors: Chain infrastructure, DeFi, and gaming sectors have consistently attracted the most funding over the last 12 months.
- Infrastructure vs Application: There has been a subtle shift away from user-facing applications towards infrastructure projects, although this trend may not last long.
- Chain Infrastructure: Despite only 21 deals, the chain infrastructure sector accounted for the largest share of funding during Q3.
Investor Activity
- Most Active Investor: Binance Labs emerged as the most active investor with 23 deals during Q3, more than double the next closest investor.
- US-Based Investors: Despite project founders moving away from the US, 54% of the active Q3 investors were based in the United States.
- Long-Tail of Investors: Despite the activity of the top 10 most active investors, crypto fundraising is still dominated by the long-tail of investors.
Actionable Insights
- Monitor Early-Stage Projects: Given the shift towards early-stage projects, it may be beneficial to closely monitor these projects for potential growth opportunities.
- Investigate the Potential of Leading Sectors: The chain infrastructure, DeFi, and gaming sectors consistently attract the most funding, suggesting potential growth and development in these areas.
- Consider the Role of Strategic Investments: The increase in strategic investments indicates a potential strategy for navigating harsh market conditions.
