The crypto market has been on a downward spiral for the last few months, but as per the State of Blockchain report from CB Insights, this negative movement hasn’t slowed down venture capitalists (VCs) from funding blockchain startups, at least in the first quarter of this year.
In fact, funding in Q1 2022 hit an all-time high for the seventh straight quarter, with startups managing to raise a record-breaking $9.2 billion in venture capital.
CB Insights compiled the figures after analyzing a total of 461 deals around the world, at an astonishing average of over seven deals per day. 28 of these deals helped raise over $100 million, with 13 of them being valued at over $200 million. Also of note is the fact that 63% of the global funding amounting to $5.8 billion went to US-based startups.
The list of blockchain unicorns (companies valued at over $1 billion) added 14 new entries in Q1 2022 taking the total up to 62. Once again it’s the US that’s ahead of other countries as it accounted for a vast majority of the new unicorns, now playing host to 40 of these behemoths.
Another interesting trend in the report is the shifting of VC dollars from centralized crypto exchanges and custody providers to non-fungible tokens (NFTs) and decentralized finance (DeFi) startups.
For the first time ever, NFT startups, including NFT marketplaces, games, and infrastructure providers, attracted more venture funding ($2.4 billion) than any other type of blockchain company. As a matter of fact, two of the most valuable new unicorns are NFT startups, namely, Yuga Labs and Immutable.
Meanwhile, funding and deals for DeFi startups are on pace for a record year as well, with $2.1 billion invested across 71 deals. If the trend continues, DeFi startup funding for this year will easily obliterate last year’s totals considering the DeFi sector raised a total of $3.4 billion from 250 deals in all of 2021.
Honk Kong-based Animoca Brands emerged as the top blockchain investor for the second straight quarter after doling out capital to a record 34 startups. However, as has been the theme of this year, 8 of the top 10 blockchain investors come from the US, while the other two are from Hong Kong.
Considering the fact that many of these deals would have been in the works before the onset of the downward momentum in the DeFi economy, we’ll be keeping our eyes peeled to see if the funding trend continues on its upward spiral across the remaining quarters of 2022 as well.
