FameEX Hot Topics | March Sees a 53% Increase in Crypto VC Funding, with Optimism Securing the Biggest Portion

Last month, venture capital (VC) investment in the cryptocurrency sector surged by 52.5% to $1.16 billion across 180 investments, marking a significant increase in funding, particularly for infrastructure and decentralized finance (DeFi) projects. This rise in investment activity has been the most notable since April 2022, according to RootData, showcasing a robust interest in the crypto space.

A notable distribution of funds saw one-fifth of the deals ranging from $1 million to $3 million, and over 15% of the investments fetching between $5 million and $10 million. While the majority of funded projects were U.S.-based, they accounted for less than 10% of the total deal count. The largest funding round of the month was secured by Ethereum layer-2 blockchain Optimism, which raised $89 million through a private token sale, followed by cryptography startup Zama, which closed a $73 million Series A round.

The increase in deals represents a 25% rise from February and a substantial 70% jump from the same period last year. Moreover, the total amount raised in March 2023 was 28% higher than in March of the previous year. This resurgence in VC interest is underscored by recent moves from prominent VC firms. For instance, Andreessen Horowitz (a16z) announced a $30 million fund dedicated to Web3 gaming on April 1.

Furthermore, last week, Marc Andreessen of a16z and Galaxy Digital played key roles in a $75 million fund by VC firm 1kx, aimed at crypto-based consumer apps. Additionally, Hack VC raised $150 million in February to support early-stage crypto and artificial intelligence startups.