Amid the bear market, Web3 startups raised $7.1 billion

Despite the unprecedented crisis in the crypto market, Web3 startups raised more funds last year than in 2021.

By 2022, Web3 startups have attracted some of the most high-profile venture capitalists on the planet, including investment banks such as Morgan Stanley and Goldman Sachs. Most fundraising has been led by crypto investment funds such as Binance Labs, Coinbase Ventures and Kraken Ventures.

Source: Wholesale Investor

While the bear market was in full swing, 348 Web3 startups raised a total of $7.16 billion in 2022. According to a report by the magazine Metaverse Mailthis figure is almost double the amount collected in 2021.

Startups that have appealed to investors come from a variety of industries, including gaming, metaverse, social media, virtual reality and artificial intelligence. Likewise, several sub-sectors of the crypto market have successfully attracted capital in 2022.

In the second quarter of 2022, metaverse projects and games raised several million dollars. “Venture capitalists then moved into Play-to-Earn gaming, paying particular attention to blockchain casinos, collectibles, loot boxes and soccer-related games,” the report said.

Artificial intelligence, a sector that makes investors dream

During the last quarter of 2022, investors turned their attention to Web3 startups specializing in augmented, virtual and mixed reality. Artificial intelligence applications, such as the ChatGPT bot, have also attracted a lot of interest from venture capitalists.

For example, InworldAI raised $50 million in a Series A funding round, while SEED raised $41 million. Similarly, SingularityDAO and MarqVision raised $25M and $20M respectively in their funding rounds.

“Venture capitalists are unlikely to lose interest in artificial intelligence (AI) in 2023. More AI startups are expected to secure funding,” the report reads. Metaverse Mail.

Similarly, investors are focusing more on the security of the crypto ecosystem given the rise in crypto hacks and scams. Consequently, the total investments received by Web3 startups specializing in blockchain infrastructure increased sharply in 2021.

Source: Metaverse Post

These Web3 startups that have seduced investors

At the top of the list is video game studio Epic Games, which raised $2 billion from Sony and KIRKBI. Epic Games intends to use these funds to “achieve its vision for the metaverse and sustain its growth”. Currently, the company is valued at $31.50 billion.

Funding raised by Web3 startups
Source: Metaverse Post

Next, Yuga Labs, the parent company of Bored Ape Yacht Club (BAYC), has raised over $400 million to develop its Otherside metaverse. Given the dazzling success of its NFT collection, Yuga Labs is now one of the most sought-after Web3 startups by investors.

Animoca Brands, a metaverse-focused startup, also made the top 3. It is followed by Immutable, a Sydney-based Layer 2 platform. According to Metaverse Mailmost of the investments come from four venture capitalists.

Who are the biggest crypto backers?

Paradigm, a San Francisco-based investment firm, has become the most active investor in the Web3 world. By 2022, the company spread an envelope of $2.50 billion across 31 crypto projects, including Coinbase, Uniswap, Magic Eden and Optimism.

Source: Metaverse Post

With a total investment of $2.20 billion, Andreessen Horowitz (a16z) has become the second most active venture capitalist after Paradigm. The fund is followed by HiveMind Capital Partners, which has invested $1.5 billion in Web3 startups. Finally, Binance Labs came in at #4 with a total investment of $1 billion.

While profitability is on the agenda, losses are also part of the game. For example, the bankruptcy of hedge fund Three Arrows Capitals (3AC) netted its investors several million dollars. Not to mention the collapse of FTX, which reverberated throughout the crypto market.

While venture capitalists have the means to recoup their losses, the average investor only has eyes to cry. Therefore, it is necessary to carefully study the projects in which we invest.

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