TLDR:
- Funding to Web3 startups remains steady, with just over $2 billion raised in Q2.
- While funding increased from the previous quarter, deal flow shrank by about 25%.
In the second quarter of 2024, Web3 startups raised just over $2 billion in funding, showing a slight uptick from the previous quarter but an 18% drop from the same period last year. This marks the second consecutive quarter of increased funding after eight quarters of decline. While the overall funding picture has improved, deal flow decreased by about a quarter in Q2, with only 292 rounds announced.
The biggest round of the year was secured by New York-based Monad Labs, which raised $225 million in funding led by Paradigm. Other notable rounds in the Web3 space include Los Angeles-based Farcaster, Berachain, Auradine, and Humanity Protocol, which raised significant amounts. The funding landscape seems to suggest that investors are once again interested in building up the infrastructure of the sector, a crucial step for the success of application layers in Web3.
While the future of Web3 funding remains uncertain, the recent trends indicate a potential inflection point for the industry. Bitcoin and Ether have shown significant gains in recent months, hinting at a resurgence of investor interest in cryptocurrencies. However, the decrease in deal flow could indicate that investors are becoming more selective in their choices. The next few quarters will be instrumental in determining the trajectory of Web3 funding.
