Funding in the Web3 ecosystem has dropped significantly between June 2022 and June 2023. In the first half of last year, Web3-related projects and startups managed to raise $16 billion (roughly Rs. 1,31,404 crores) in funding. On the other hand, till June this year, only $3.6 billion (about Rs 29,568 crore) has been invested by venture capital firms in the Web3 initiative. According to a Crunchbase report, this marks a 78 percent drop in funding for the digital asset sector profitably.
Companies engaged in related activities cryptocurrency, non-fungible token (NFT), metaverse, as well as blockchain gaming – all fall under the Web3 classification. In the absence of regularity clarity, many promising web3 Projects rely heavily on securing external funding to start their operations.
A total of 322 deals were finalized between Web3 projects and investment capitalists between April and June this year. Collectively, these deals have managed to raise $1.8 billion (roughly Rs. 14,782 crores).
In contrast, between April and June 2022, Web3 startups managed to raise $7.5 billion (roughly Rs. 61,585 crores). Crunchbase Reports Said.
“While seemingly all sectors are seeing a downturn in venture capital, Web3 – defined here as cryptocurrency and blockchain startups – has been hit the most. In fact, deal flow hit its slowest pace since the last quarter of 2020, when only 291 deals were announced for a total of $1.1 billion (roughly Rs. seven crore). The report noted that Web3 funding saw a dramatic year-over-year decline, with larger rounds certainly playing a role.
While the digital asset sector has struggled with market volatility – as well as a lack of regularity clarity – the focus of venture capital firms has shifted to other tech sectors.
companies operating in the field of artificial intelligence (AI) Recently attracted the attention of venture capital firms.
“However, there is no denying the massive collapse of large crypto exchanges – we all know the names – and recent regulatory actions in the US have likely deterred some investors from looking into the digital asset sector. Will those investors come back, or invite more existing investors? The numbers certainly don’t trend that way. Crunchbase reports that now investors are very wary of investing money in anything except AI.
Recently, music NFT startup ‘sound’and Web3/AI firms Olympics Managed to get funding worth lakhs.