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.
[adinserter block="1"]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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