Crypto Startups Flourish as Venture Capitalists Inject $485 Million in February

Crypto Startups Flourish as Venture Capitalists Inject $485 Million in February

February witnessed a notable surge in venture capital investments flowing into cryptocurrency startups, indicating growing confidence and interest in the digital asset space among investors.

According to data from DefiLlama, cryptocurrency startups collectively received a substantial infusion of $485 million in funding last month, marking a 5.3% increase from the previous month and the highest investment volume in the last quarter.

Infrastructure-related startups emerged as the primary recipients of funding, with $387 million allocated to support their growth initiatives. Notably, EigenLayer secured a significant investment of $100 million from a16z during a private funding round, representing the largest venture capital allocation to a crypto startup in February.

EtherFi, a liquid staking platform, also garnered attention with a noteworthy $27 million investment in a series A round led by Bullish and CoinFund. Additionally, the payments platform Oobit concluded a successful series A funding round, securing $25 million, with leading contributions from Tether and CMCC Global.

Decentralized finance (DeFi) projects attracted over $48 million in investments during the same period, with Superform Labs leading the pack by securing $6.5 million in a seed round led by Polychain Capital. Omega’s initiative to establish a DeFi ecosystem on top of Bitcoin also received a substantial $6 million investment in a private round, with participation from Borderless Capital and Blockchain.com.

Web3-focused applications were not far behind, drawing nearly $18 million in funding. Notable among them was Beoble, a web3 messaging app and social platform, which received $7 million from investors including Samsung Next and Hashkey Capital.

The gaming sector also witnessed a surge in investment, with $33 million directed towards new game studios. Helika, a gaming studio, raised $8 million in a series A round led by Pantera Capital, while web3 game Pixelmon attracted $8 million from Animoca Ventures and Delphi Ventures.

Despite the optimism and robust activity seen in February, a broader perspective from PitchBook data suggests a slowdown in crypto market investments compared to previous periods. In the third quarter of 2023, venture capitalists invested $2 billion in crypto, marking a 63% decrease from the same period in 2022. This decline in funding levels is attributed to a reduction in the size of deals, as noted by PitchBook analyst Robert Le.

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