Crypto fundraising hit a snag in Q3, touches 3-year low: Messari
- The U.S. was still the top destination for crypto investors as 54% of all the active investors in Q3 were based here.
- Crypto intelligence firm Messari revealed these findings in its latest report.
The crypto industry could raise only a mere $2.1 billion across 297 deals in the third quarter of 2023.
In Q3 2023, it hit the lowest for a quarter in the last three years for both funding amounts and deal counts. The last time crypto funding was so scarce was in Q4 2020.
Crypto intelligence firm Messari revealed these findings in its “State of Crypto Fundraising – Q3 2023” report.
Another notable trend was an increased amount of funding for infrastructure-based projects compared to user-facing applications.
However, this trend may not last for long as more investors are beginning to realize that without successful user-facing crypto applications, infrastructure investments are less likely to generate their desired returns.
Trends in deal counts indicate that over the last three years, investors have been moving away from later stage projects towards early-stage projects.
Early-stage rounds were where the majority of the deals in Q3 were made. Seed fundraisals saw the largest inflow with crypto firms raising a total of $488 million over 98 seed rounds.
Early-stage deals in Q3 2023 accounted for 48% of all deals, up from 37% in Q4 2020. Later stage deals have dropped from 8% in Q4 2020 to barely 1.4% in Q3 2023.
U.S. the top destination for crypto investors
About 54% of all the active investors in this quarter were based in the U.S. This might sound surprising as there is a lot of hullabaloos about crypto enthusiasts moving out to more regulation-friendly countries.
But the U.S. continues to remain the top destination for most of the crypto investors.
The top 10 most active players in crypto funding made 98 investments during Q3. However, this group of investors only made 7% of all the deals.
Binance [BNB] Labs emerged as the most active crypto investor in Q3. It made a total of 28 deals this quarter. It is keen on investing in firms focused on decentralized finance (DeFi), gaming, and zero-knowledge technologies.