Crypto Startups Need More Than Just Tech to Secure Funding: OKX

Crypto startups looking for venture capital (VC) funding must demonstrate more than just strong tech—they need to show an ability to pivot and adapt to market trends, according to Jeff Ren, head of OKX Ventures, the investment arm of the crypto exchange OKX.

“For founders looking to work with us—yes, your tech needs to be solid, but we’re equally interested in how you adapt to what users actually need,” Ren said in a recent interview. He stated that some of the most successful projects OKX has backed initially failed to meet their expectations but later returned with refined, market-aligned solutions.

Ren’s insights come amid a notable decline in venture capital investments in the crypto space. According to PitchBook data, crypto startups secured just $10 billion across 1,940 deals in 2024, a significant drop from the $30.2 billion spread over 3,500 deals in 2022.

OKX’s Investment Strategy and Market Approach

Despite the downturn in funding, OKX Ventures deployed over $100 million in 2024 to support 60 crypto startups, particularly those building within the Solana, Sui, Aptos, TON, and Bitcoin ecosystems.

Ren explained that OKX leverages data from its OKX Wallet to gauge market trends and guide investment decisions. However, when evaluating startups, the first question OKX asks is whether its wallet infrastructure can integrate with the project and create value.

Taking Web3 gaming as an example, Ren said that OKX’s wallet could enhance a GameFi studio’s ecosystem by facilitating in-game asset purchases and providing on-chain liquidity. If a project aligns with OKX’s infrastructure, “we’re happy to create a position within your project and connect you with our wallet,” Ren noted.

However, he acknowledged that VC firms have tightened their investment criteria. Unlike the 2020-2021 bull run—when startups with only a white paper and a small team could raise millions—investors now demand tangible progress, including gameplay for gaming projects, experienced developers, security audits, and clear utility.

The Future of Crypto Investment

Looking ahead, Ren sees artificial intelligence (AI) playing a crucial role in refining DeFi trading experiences. He also believes NFTs will eventually find their true market fit, and there’s growing potential in bringing intellectual property assets on-chain. Interestingly, he also pointed to the rise of memecoin infrastructure, an area he believes holds untapped investment opportunities.

With VCs becoming more selective, securing funding in the crypto space now requires more than just an innovative idea. Startups must prove their adaptability, utility, and long-term sustainability in an ever-evolving market.