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Billions Invested by VCs in 2023 Despite US War on Crypto

Billions Invested by VCs in 2023 Despite US War on Crypto

Venture capital investment may typically slow down during bear markets, but several large investments in the crypto and Web3 space have already been made this year.

Despite regulatory uncertainty and hostility towards the sector in the United States, investors seem undeterred.

The DeFi Investor highlighted some of the biggest fundraises in the crypto and Web3 sector so far in 2023 on April 18th.

Venture Capital Continues to Flow

Although some of the industry’s largest VC firms like Three Arrows Capital and Alameda Research have collapsed, analysts believe that “crisis means opportunity.”

LayerZero raised $120 million this year from firms like a16z and Sequoia Capital. The protocol enables the creation of cross-chain dApps that are interoperable across all major chains and has been valued at around $3 billion following its $135 million Series A in March 2022.

Scroll ZKP secured $50 million in funding at a $1.8 billion valuation with investors like Polychain Capital and Sequoia. The project enables Ethereum Virtual Machine (EVM) smart contract development.

Ethereum restaking platform Eigenlayer also raised $50 million in a round led by Blockchain Capital. The protocol enables ETH to be restaked into other networks to boost their security and crypto economics.

Artificial intelligence-focused crypto protocol raised $40 million from market maker and investment firm DWF Labs. The platform intends to use AI to automate tasks such as executing transactions.

Other crypto and Web3 projects that have raised VC funding this year include social platform Plai Labs with $32 million and optimized trading platform Sei Network with $30 million.

Pivot to Asia

Additionally, companies in the crypto sector are becoming more cautious of the United States and turning towards Asia.

A number of multi-million dollar funds have been launched to invest in Asian Web3 and crypto startups, including the $100 million Bitget Web3 Fund announced this month.

According to Bitget, the purpose of the Asia-focused fund is “to foster a positive attitude towards the digital currencies economy and support the development of the web3 environment.”

In late March, Hong Kong investment firm ProDigital Futures also announced plans to invest $100 million in crypto and Web3 startups in the region.

When Hong Kong rolls out its crypto framework in June, it may become a hub for VC investment, with significant funds from mainland China poised to enter the sector through this legal avenue.