Venture capital funding for crypto startups saw a slight uptick in Q2 compared to the previous quarter, despite a decline in the number of deals, according to data from Pitchbook. The total invested capital increased by 2.5%, while the number of deals dropped by 12.5% in Q2. This could be an indication of growing interest from institutional investors in the crypto market.
Pitchbook suggests that the return of positive investor sentiment towards crypto, coupled with a lack of major market downturns, is driving the increase in funding. The report predicts that the volume and pace of investments will continue to rise throughout the year.
Infrastructure projects dominated Q2 funding, with notable raises from layer-1 platform Monad, which secured $225 million in a Series A funding round. BeraChain, a DeFi protocol that introduces a new Proof-of-Liquidity model, raised $100 million in a Series B round. Babylon, a Bitcoin restaking platform, also raised $70 million in an early-stage round.
In addition to these significant raises, Pitchbook highlighted two “mega-rounds” in Q2. Farcaster, a decentralized social media protocol, secured $150 million in a Series A round at a $1 billion post-money valuation. Zentry, a blockchain gaming platform, raised $140 million in an early-stage round.
While the overall funding landscape for crypto startups saw positive growth in Q2, there is still room for improvement. Entrepreneurs and startup founders continue to seek funding from institutional investors to propel the industry further. With increased interest and confidence in the crypto market, the future looks promising for these innovative startups.