TLDR:
- Web3 investment increased by 55% in Q1 of 2024, signaling a rebound in crypto VC interest.
- AI and gaming-related Web3 protocols received the most investment in the quarter.
The first quarter of 2024 saw a significant rise in Web3 investment, with total funding increasing by 55% compared to the previous quarter. This increase in investment indicates a resurgence of venture capital interest in the crypto space, with the number of Web3 VC deals rising by 36% during the same period. The QuickNode and Artemis Q1 on-chain report highlighted that AI and gaming-related Web3 protocols attracted the most significant investment, suggesting a favorable shift in VC sentiment towards Web3.
One notable investment deal was led by crypto-focused VC firm Paradigm, which spearheaded a $225 million funding round into Monad Labs, a new layer-1 blockchain network aiming to compete with Solana. Additionally, early-stage rounds, such as a $42 million Series B round by Berachain and a $35 million pre-seed round for 0G Labs, also contributed to the growth in Web3 investment. Seed rounds saw a 53% increase quarter-on-quarter, indicating a surge in early-stage deal activity.
VC interest in Web3 was further showcased by several key investments announced ahead of the 2024 Bitcoin halving. For instance, Bitcoin layer-2 network Mezo completed a $21 million Series A funding round led by Pantera Capital on April 9. Reports also emerged about Paradigm negotiating to raise up to $850 million for a new fund, potentially becoming the largest raise in the crypto industry since 2022.
In conclusion, the rise in Web3 investment and VC interest in the first quarter of 2024 signifies a positive momentum shift in the crypto space, particularly towards AI and gaming-related protocols. This resurgence in funding and deal activity reflects a renewed willingness by VCs to invest in Web3 projects.
