Crypto Startups Secure More Funding in Q2 Despite Fewer Deals

August 12, 2024

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Crypto startups have managed to raise slightly more capital in the second quarter of 2024 compared to the first, despite a noticeable drop in the number of deals. According to a report from Pitchbook, the total capital invested in these startups saw a modest increase of 2.5% over the previous quarter, while the number of funding rounds declined by 12.5%.

This upward trend in capital, coupled with fewer deals, suggests a renewed sense of confidence from institutional investors. The report from Pitchbook indicates that this increase in funding could be a sign that investors are placing large bets on fewer, more promising projects. It writes:

“With positive investor sentiment returning to crypto and barring any major market downturns, we expect the volume and pace of investments to continue increasing throughout the year.”

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Infrastructure Projects

A closer look at the data reveals that infrastructure projects have been the biggest beneficiaries of this renewed interest. Among the standout funding rounds in Q2 was the $225 million Series A raised by Monad, a layer-1 blockchain platform.

DeFi protocol BeraChain also made headlines with its $100 million Series B round. BeraChain, which operates on a novel proof-of-liquidity consensus model, has attracted attention for its innovative approach to decentralized finance.

Another noteworthy mention is bitcoin staking platform Babylon that secured $70 million in an early-stage round. Babylon’s approach to enhancing the security and efficiency of Bitcoin’s network has resonated with investors who are keen on supporting projects that strengthen the core infrastructure of the cryptocurrency ecosystem.

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In another notable development, Mastercard has continued to expand its exploration of blockchain technology, adding five new startups to its Start Path Blockchain and Digital Assets program. In April, Mike Novogratz’s Galaxy Digital was reportedly raising a $100 million venture fund aimed at supporting early-stage crypto startups.

A Far Cry from the Past

However, the current landscape is a far cry from the funding frenzy of 2021 and 2022, which saw $25.3 billion and $29.4 billion raised, respectively. So far in 2023, crypto startups have attracted $10.1 billion in investments, with the year on track to reach $10.8 billion if the current pace continues.