Crypto companies suffered a dramatic year-on-year decrease in venture funding in the first quarter of 2023, according to the data analysis firm PitchBook.
PitchBook notes in a new quarterly report that crypto companies raised $2.6 billion in global venture capital in 2023 Q1, a 78% decrease from the first quarter of last year and the lowest amount of money invested in the sector since the fourth quarter of 2020.
The firm also reveals that crypto companies closed 353 deals in Q1, which represents a 64.4% decrease from the number of deals in the same period last year.
PitchBook says that the $2.6 billion raised across 353 deals in Q1 represent an 11% decrease in deal value and a 12.2% decline in the number of deals on a quarter-over-quarter basis.
Despite the monetary decreases, PitchBook notes that there are some “bright spots” in 2023 Q1. The firm says layer-2 scaling solutions continued to attract venture funding, “continuing momentum from 2022.”
“Bitcoin scaling platform Blockstream raised a $125.0 million convertible note and debt round, and it will use the funds to build out Bitcoin mining infrastructure. The company previously raised a $163.1 million Series B in August 2022.
Scroll, which is building a zero-knowledge Ethereum Virtual Machine (zkEVM) scaling solution, raised a $50.0 million late-stage VC (venture capital) round in Q1. Crypto custodial services also received significant investments, including a sizable round for Ledger, which raised a $493.0 million Series C, and Taurus, which drew a $65.0 million Series B.”
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