Less Funds For Crypto Startups With Global VC Totalling $2.4 Billion In Q1 Of 2023, Down By 80%

Crypto currency background with various of shiny silver and golden physical cryptocurrencies symbol coins, Bitcoin, Ethereum, Litecoin, zcash, ripple.

Private funding in crypto startups has fallen dramatically this year as the industry reels from scandals, bank implosions and regulatory uncertainty, Bloomberg reported this week, citing data from research company PitchBook.

Global venture capital (VC) funding for crypto startups totaled $2.4 billion in the first quarter of 2023, its lowest level since 2020, according to PitchBook. The figures represent an 80% slump in private VC investment compared to an all-time high of $12.3 billion recorded in the same period last year, data showed.

Crypto startups have faced a tougher fundraising environment following the bankruptcy of crypto exchange FTX. Deals have become slower to convert to capital as cautious investors are now carrying out months of research with higher scrutiny before making funding decisions.
“It’s not going to be based on FOMO [fear of missing out] or what other investors are doing,” PitchBook analyst Robert Le said.

Echoing his comments, co-founder of the Berlin-based M^Zero Labs startup, Luca Prosperi, said that his company had begun fundraising talks in October, shortly before the collapse of FTX, and had finally managed to secure $22.5 million in funding this month. The implosion of the largest crypto currency exchange “forced investors to keep asking more questions,” Prosperi said.

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