Funding for a new batch of VC projects expanded in October, after a slowdown in the preceding month. A new series of high-profile rounds showed crypto building did not stall.
VC-backed projects expanded in October, attracting $2B in the past 30 days. October proved successful after a slowdown in the past month. The period was marked with new deals from Animoca Brands and multiple Tier 1 funds. For the month of October, funding rose by 263%, spreading the sum to 107 deals.
Fundraising revived in October, breaking above $2B for the first time since September 2022. | Source: Cryptorank
The October results come after a slowdown to $672M in September deals, breaking a three-month sliding streak. The level of funding is the highest since September 2022, though far from the peak of $7.21B in April 2022. Crypto VC funding is highly cyclical, often depending on ETH-denominated treasuries instead of fiat.
In the year to date, more than $11B was raised in funding, showing a trend of recovery after funding dried out in 2023. Funding collapsed after peaking at $21.6B at the end of 2022, precipitated by the crash of FTX, as well as 3AC. The past year showed the top funds were ready to rebuild, with more careful and targeted rounds. The projects selected do not have a significant social media footprint and are different from the community-based ethos of meme tokens.
The latest month of fundraising had a different profile, featuring a much smaller number of large-scale deals. The average round was for $3M to $10M, but projects like Glow attracted $30M. Overall, VC-backed projects have created skepticism, especially after teams extracted value by selling their tokens.
One of the high-profile rounds included $10M in strategic funding for Toncoin (TON), underscoring the chain’s growing popularity.
The October results also included some outsized deals, like the $210M Blockstream fundraising and an undisclosed round for $525M to Praxis Society.
Animoca Brands leads fundraising
Animoca Brands participated in 102 of the 107 deals for October. The fund was an indicator of the major trends in selecting new crypto startups. Projects with utility and infrastructure continue to seek VC backing, while the market is still going through its meme token craze.
The new selection of projects marks a shift for Animoca Brands, with a focus on utility projects. Previously, Animoca Brands was instrumental in building NFT projects and P2E games, DAO startups, and AI.
Animoca Brands also focused on the Arbitrum ecosystem. Despite the risk of those types of projects, Animoca Brands managed a 145% return toward the end of 2024. Other VC funds have a mixed performance, with most of the older portfolios sliding in October.
Last month’s funding spree was instead focused on infrastructure. The main focus on deals was for developer tools. More than 26% of all deals focused on developer tools, while AI remained a hot topic, though funding slowed down compared to previous periods. DEX, data services, and Ethereum-based projects have been the other focus areas of VCs in the past month.
More than 31% of funding went to seed rounds, creating the next wave of crypto startups. About 37% was for undisclosed rounds, including the two leading deals for the month that went to established companies.
Crypto funding slows down amid a global crunch in VC projects. In Q3, overall funding contracted to a seven-year low, with a total of $70B raised for the three months ending in September. VC funding outside of crypto slowed down despite one hot quarter of AI startups that managed to raise $19.1B.
Within crypto, rounds of $100M are now a rarity, and the age of large-scale projects seems to be in the past. Instead, market leaders like VanEck have created vehicles for testing up and coming projects with smaller rounds. Crypto VC funding has to balance its selection of projects, as the hype has drawn significant rounds to startups with no users.
The L2 hype was among the biggest funding narratives, though not all chains managed to draw traffic and liquidity. At the same time, the truly successful apps and movements arrived with almost no funding, but with a presence on the Telegram chat app or on social media.