Is the Big Fundraising for Blockchain Platforms Gone?
A bearish crypto market will affect the broader investment sentiment. Not just for coin prices and risk appetite, VC funding and other fundraisers. Interestingly, several projects continue to grow strongly in these challenging times.
Bear Market and Fundraising in 2022
It is challenging to convince investors and VCs about a project in the crypto and blockchain space when the general mood of the industry deteriorates. The 2022 bear market – which began in late 2021 – shows no signs of letting up. All currencies remain under enormous pressureand prevents any uptrend from materializing.
However, there are advantages to an extended bear market. It is an excellent opportunity for builders to put their best foot forward and work on the project they want to bring to life. There is no time pressure to launch before market momentum improves. Or even launching in the bear market is viable, since the project will still have a “new” element. Crypto enthusiasts haven’t had much reason to be excited, but new product launches could change that narrative.
Unfortunately, many projects are struggling on the fundraising front. Overall, crypto startup funding hit a 12-month low in August 2022. Although these fundraising efforts resulted in $1.36 million in venture capital invested for the month, it is the fourth consecutive monthly decline. Also, the figures for August fell by over 31% compared to July 2022.
The silver lining is how over 100 fundraising deals closed in August. Maintaining close to or above 100 per month shows that there is still a lot of developer activity in the area. In addition, the current trend confirms that VCs and other investors are keeping their finger on the pulse of crypto and blockchain. Such numbers are not terrible, given the extensive bear market conditions.
There is hope for Web3 and NFTs
The investigations for August 2022 highlights three important industries: NFT, Web3 and infrastructure. Projects in these segments remain successful in their fundraising efforts. Specifically, this effort represents over 85% of the monthly money collected. Most of the money came from Limit Break’s $200 million round and Barca Studios securing $100 million. DeFi and CeFi efforts also welcomed some investment, but are not as popular as Web3, NFTs or infrastructure.
On that note, CoinFund saw a very bullish fundraising effort. Web3 and crypto VC firm introduced a new $300 million fund to support startups. This is good news for the many projects in development or early concept stage. Web3 gaming and metaverse initiatives in particular remain of great interest. Projects with a clear vision will often raise capital without too many problems, provided they can provide something new.
When we talk about Web3 games, Apeiron developer Foonie Magus raised over $17.5 million through fundraising efforts. The team has done it in the first five months after the launch of the website. That’s a significant boon for Web3 Games, as they raised money during the bear market. In addition, Apeiron secured $4.5 million through the NFT sale over Easter, and Foonie Magus will launch the game in Q4 2022.
Although popular titles like Axie Infinity seem to have lost momentum in Web3 games, new projects are eager to take the limelight. Many valuable lessons have been learned to create better engagement and sustainable economies. A God game like Apeiron has not been done before on the blockchain. Also, the significant community effort before the launch of the game has kept the momentum going. In addition, Foonie Magus introduces new ways to use NFTs and how to use them in the gaming environment.
The general outlook remains positive
Although the MoM collection numbers continue their downward trend, there is reason to be cautiously optimistic. Investors, VCs and other contributors continue to help crypto startups grow. Moreover, the increasing focus on NFTs and Web3 shows that there is still much to explore. With so much support for building crypto startups, something has to give eventually.
An interesting thing to keep in mind is how industry growth does not necessarily correlate with crypto asset prices. The ongoing crypto bear market has not stopped developers from building their projects. If anything, there is still sufficient speed to keep the ball moving. It is too early to say that Q4 2022 will bring any change in the overall numbers, but the current trend is not as bad as some might think.
