VC funding into Web3 startups plummeted from $9.1 billion in Q1 2022, to $1.7 billion in Q1 2023, with the number of nine figure deals declining from 29 to 2 in that time frame.
According to data from Crunchbase, venture capital funding into Web3 start-ups tanked 82% year-over-year , declining from $9.1 billion in Q1 2022 to $1.7 billion in Q1 2023.in an April 20 report, noting that the $1.7 billion figure for Q1 2023 also marks the lowest amount of Web3 start-up funding since the $1.1 billion posted in Q4 2020 — a time in which “many people had never heard of Web3.”
In this context, Web3 startups are defined as early-stage companies that are either working directly with crypto or blockchain tech . Deal flow, or the number of total deals between VCs and Web3 startups, also saw a significant drop with the 333 deals recorded in Q1 2023 marking a YoY decline of roughly 33%.Additionally, the report highlights that the number of big Web3 start-up funding rounds hitting nine figures almost completely dried up over the past year.
“In Q1 2022, VC-backed startups raised 29 rounds of more than $100 million. That included massive raises of $400 million or more by ConsenSys and Polygon Technology, as well as — of course — FTX and its U.S. affiliate FTX US,” the report reads, adding that: “The most recently completed quarter saw only two rounds hit the nine-figure mark, as VCs have hit the brakes on spending big in the space.”acknowledged that interest in Web3 start-ups has cooled of late, it also emphasized that “venture funding is down in almost every sector.”
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