TLDR: Web3 Venture Funding Stabilizes After Rocky 2023
- Web3 venture funding is stabilizing after a decline in 2023, with $2 billion raised in Q2 of 2024.
- Deal volume remains low, with only 291 financing rounds closing in the second quarter.
Venture funding for Web3 startups is showing signs of stabilization after experiencing a year-long decline that began in 2023, according to data from Crunchbase. In the second quarter of 2024, crypto ventures secured around $2 billion in financing, a slight increase from the previous quarter’s $1.8 billion. This marks a reversal of the downward trend that saw Web3’s quarterly venture funding decrease by almost half from Q1 to Q4 of 2023.
Despite the rebound in funding amounts, deal volume in the Web3 sector remains low, with only 291 financing rounds closing in Q2 of 2024. Larger funding rounds are still uncommon, with only seven deals exceeding $50 million during this period.
One significant deal that contributed to the recovery in Q2 2024 was New York-based Monad Labs’ $225 million funding round led by Paradigm. Other notable deals included Farcaster’s $150 million Series A, Berachain’s $100 million round, and Auradine’s $80 million round.
The limited deal flow in the Web3 sector can be attributed to venture fund investors waiting on payouts from previous investments before committing to new deals. Venture capital firms are also running low on available capital, leading to a cautious approach to funding new initiatives.
Overall, while Web3 venture funding is showing signs of stabilization, the sector continues to face challenges related to deal volume and the availability of capital from investors.
