Executive Summary:
The number of projects attracting investments continues to rise, with 112 projects raising investments in October, compared to 99 in September and 63 in August. However, in terms of funding, there was a decrease compared to the previous month, with $430 million raised in October, down from $562 million in September, although still higher than the $349 million raised in August, two months prior.
In October, there was a notable surge in cryptocurrency prices towards the end of the month. The price of Bitcoin increased by 21%, breaking the psychologically important mark of $30,000. Altcoins followed Bitcoin’s upward trend. If the price of cryptocurrencies remains at the current level, there is reason to expect increased activity from both venture capital funds and new projects.
Alongside the price increase, the battle between layer-2 ecosystems for users and the expectation of Bitcoin halving in April 2024 may help revive investment in new projects. However, the global rise in the cost of money may limit this growth and even eliminate it.
In October, the top 10 biggest rounds accumulated a total of $178 million, which accounted for 41% of all VC investment in that month.
Now, let’s take a closer look at the top 3 leaders:
In October, venture capital showed reluctance to make significant investments in the crypto market. Only 9 rounds exceeded $10 million, indicating a cautious approach. This suggests that venture capital does not anticipate significant industry growth in the near future.
The chart below demonstrates that venture capital largely prioritizes early-stage investments, with a particular focus on emerging projects. Although there are a significant number of undisclosed deals, there is no indication that the distribution would change if these deals were made public.
Out of the 112 investment rounds in October, the top ten most active investors accounted for 31 deals, which is approximately 26% of all rounds.
Andreessen Horowitz (a16z) is reportedly preparing to raise $3.4 billion for its upcoming early and seed-stage venture funds. As the largest venture capital firm in terms of assets under management, it plans to launch its fundraising campaign by the end of this year and aims to conclude it in the first half of 2024. This is a positive sign for the industry as a whole.
In October, DeFi emerged as the most popular category in terms of funding rounds, with 41 rounds. It was followed by Blockchain Services with 36 rounds, and GameFi with 10 rounds. However, in terms of the amount of money raised, the Blockchain Service category took the lead, securing $161.7 million last month. Startups in the DeFi and GameFi sectors raised $128.7 million and $53.3 million, respectively.
The United States continues to be the leading venture hub in the industry, with a total investment of $118.9 million spread across 24 rounds. Singapore secured the second spot in October, investing $52.7 million across 12 rounds in terms of both funds and deals closed. It is worth noting that 52 rounds, accumulating a total of $206.8 million, remained undisclosed, accounting for approximately half of the investment rounds in October.
A slight increase in fundraising activity may be supported by the recent price rally and the upcoming Bitcoin halving, which could potentially lead to heightened fundraising efforts during the winter months. November will be a crucial month for assessing the fundraising landscape. If both fundraising and cryptocurrency prices continue to rise, it could indicate the start of an upward trend. On the other hand, if November ends with lower fundraising activity and price levels compared to October, it may suggest a period of continued stagnation.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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