Investing in European crypto startups defied the bear market in 2022
The crypto industry in Europe defied the bearish trends in 2022 and saw a record level of funding. Startups in the crypto space raised over $5.7 billion in 2022, while global and US venture funding in the industry declined. This is a notable increase from the $5 billion EU companies raised in 2021.
According to data from RockawayX and Dealroom, Europe has the largest number of startups working on blockchain and crypto solutions – surpassing both the US and Asia. The majority of them are small to medium-sized early-stage companies with modest funding. Further on the startup funding journey, the US leads the way as it has the largest number of unicorns.
While European companies accounted for 20% of the total global funding of early-stage crypto startups, American companies dominated funding rounds of over $100 million.
By 2022, crypto VC funds raised over $35 billion, pushing crypto companies into the forefront of venture capital. Despite $35 billion making up only about 16% of total VC fundraising last year, it still represents the highest amount ever raised in the industry.
The ongoing bear market has not yet spooked investors. Viktor Fischer, CEO of RockawayX, said that every market cycle — whether it’s a bear or a bull — increases VC activity.
“In the past, VC funding remained relatively stable, or even moved counter-cyclically, during crypto price downturns. Investments made when digital asset prices were depressed materialized in technology and usage alongside bull market price recoveries.”
Fischer noted that some of the most notable companies in the crypto space today – including Uniswap, OpenSea, Dapper Labs and Sorare – were funded and launched during the 2018 crypto winter.
Samantha Bohbot, RockawayX’s chief growth officer, said the biggest difference between investing in bull markets and investing in bear markets is the speed of execution.
“As investors, we’re seeing the downturn change the way deals play out. Where fundraising was once quick — oversubscribed and desperately closed, sometimes days after the process started — it’s now often ramping up over months.”
While decentralized finance (DeFi) saw a 120% increase in the amount raised, centralized finance (CeFi) remains the leader in terms of VC investment.
Disclaimer: Our authors’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Do your own due diligence before taking any action related to the content of this article. Finally, CryptoSlate takes no responsibility if you lose money trading cryptocurrencies.
