Investors unfazed by Q1 crypto funding decline

Crypto-focused venture capital investors are trucking along in their work. Many remain confident in their investing strategies despite an enervated first-quarter market for crypto startup fundraising. Others are noticing a sharper decline in investing pace.

“I definitely saw a big slippage and drop in activity [in] Western markets,” in Q1 2023, said David Gan, founder and general partner of OP Crypto. “I don’t think people are heavily deploying, and rounds are taking a lot longer to close than ever before.”

In Q1, $2.53 billion in capital was raised across 347 crypto and blockchain companies, down 79% from $12.27 billion in the year-ago quarter and a decrease of about 18% from $3.08 billion raised by the same corporate cohort in the previous quarter, according to preliminary PitchBook data.

The stark contrast from the year-ago quarter is unsurprising. The crypto world was in a different place back then. FTX, for example, was still a prominent crypto exchange and raised a $400 million round, bringing its total capital raised to $2 billion and giving the company a valuation of $32 billion at the time.

The climate has changed since then: FTX crumbled and Terra/Luna collapsed (and brought down $40 billion with it). Meanwhile, a series of Chapter 11 bankruptcy filings transpired across mega crypto institutions, including FTX, BlockFi, Three Arrows Capital, Celsius Network, Voyager Digital and Genesis Global Trading.

This past quarter was a “thawing of people wanting to open their checkbooks,” Michael Terpin, CEO of Transform Ventures, said. “Right after FTX, it’s predictable that no one wanted to invest in anything.”

Investors unfazed by Q1 crypto funding decline by Jacquelyn Melinek originally published on TechCrunch