Fundraising activity fell to multi-year lows in August as the crypto market stagnated and investors worried about the future of crypto regulation. These facts are leading to a decrease in investment activity in the crypto industry, with a few projects receiving large investments from venture capital funds.
Read our new Crypto Fundraising Recap for more insights and detailed analysis of August’s investment trends.
Executive Summary:
- Investment activity fell to lowest level in more than two years in August
- Crypto startups raised $349.3M (-50.4% MoM), while the number of funding round slightly increased compared to July
- Blockchain Services attracted the largest amount of funds last month
- US-based startups lead in terms of funds raised despite regulation uncertainty in the region.
Fundraising activity fell to its lowest level in more than two years.
August has been a disappointing month for the crypto industry. The price of BTC dropped by 11.2%, with altcoin prices following the negative trend. Crypto fundraising activity also fell to its lowest level in more than two years. Crypto startups raised $349.3M (50.4% drop compared to July). However, the number of funding rounds increased slightly compared to July, 63 versus 61.
Monthly Focus: Biggest Funding Rounds.
Despite the overall decrease in fundraising activity, there were still some notable funding rounds in August.
Now let’s take a closer look at the top-3 leaders:
- BitGo, known as the custodian of WBTC, has raised $100M at a valuation of $1.75B. BitGo’s focus on being licensed and regulated has helped it stand out in the uncertain legal landscape for digital assets. The funding, received entirely from new investors, will be used for strategic acquisitions, with two deals already in process. BitGo’s previous investors include Goldman Sachs, DRW Holdings, and Galaxy Digital Ventures.
- ZetaChain, a Layer 1 blockchain operator, has raised $27M in a funding round featuring prominent investors such as Blockchain.com and Jane Street Capital. The company aims to establish a new standard for blockchain interoperability by uniting multiple blockchains on a single platform via cross-chain smart contracts. ZetaChain has already deployed over 27,000 decentralized app contracts on its network and has seen participation from more than 1.7 million users in its testnet. The mainnet launch is expected soon.
- Jada AI, an AI project utilizing blockchain technology, has secured $25M in funding from LDA Capital. The project aims to provide AI services that assist organizations in decision-making and expanding their operations. The funds will be used to expand the development team and onboard new organizations. Jada operates in a blockchain-based environment where AI computations are carried out among network nodes, ensuring secure and efficient allocation of compute resources.
Trending Categories in August
DeFi was the most popular category in August in terms of funding rounds (20 rounds), followed by Blockchain Services (16 rounds) and Social Services (12 rounds). Also, Blockchain Service category leads in terms of funds raised last month with $185.6M. This is more than half of the total funds raised in August.
Most Active Funds in August
Binance Labs was the most active fund with 9 rounds in August. It is worth noting that Binance Labs mostly invests as the lead or only investor in the round. Jump Crypto and Coinbase Ventures are also among the most active investors in August.
Geographical Distribution of Fundraising Activity in August
Despite the serious regulatory issues facing crypto in the US, the region remains the largest venture hub for the industry. In August, US-based crypto startups raised $161.3M across 10 rounds. Germany-based projects received $13.4M – the largest amount of funds raised in the EU jurisdictions. Despite the crypto ban, crypto-related startups continue to build services in China, raising $6M last month.
The Bottom Line
Summer is traditionally a time of low investment activity, and this August was no exception. Amidst crypto regulatory uncertainty and low market volatility, investment volume fell to its lowest level in more than two years.
Autumn is traditionally a time of increased investment activity from funds and projects, so it will be interesting to see if this trend continues this year.