Tag: Funding

Web3 Startup Funding Drops 82 percents YoY

by Blockchain News

According to recent data from Crunchbase, venture capital (VC) funding for Web3 startups dropped significantly by 82% YoY in Q1 2023, declining from $9.1 billion to $1.7 billion. This significant decline in funding is attributed to investors adopting a risk-off approach over the past few months by seeking out opportunities in industries they know best, such as cybersecurity or SaaS. The number of deals between VCs and Web3 startups also saw a decline of roughly 33%. The report from Crunchbase News highlights that this $1.7 billion figure for Q1 2023 marks the lowest amount of Web3 start-up funding since Q4 2020, a time in which many people had never heard of Web3.

Web3 startups are defined as early-stage companies that are either working directly with crypto or blockchain tech (or both). The report also emphasized that the number of big Web3 start-up funding rounds hitting nine figures almost completely dried up over the past year. In Q1 2022, VC-backed startups raised 29 rounds of more than $100 million, including massive raises of $400 million or more by ConsenSys and Polygon Technology, as well as FTX and its U.S. affiliate FTX US. However, the most recently completed quarter saw only two rounds hit the nine-figure mark, as VCs have hit the brakes on spending big in the space.

Although the interest in Web3 start-ups has cooled off in recent times, the report from Crunchbase also acknowledges that venture funding is down in almost every sector. The decline in Web3 funding is attributed to investors opting for a risk-off approach over the past few months by seeking out opportunities in industries they know best, such as cybersecurity or SaaS.

The decline in Web3 startup funding is also attributed to the dramatic collapse of FTX and several other crypto lenders, as well as banking issues that rattled the economy in general. However, there are some positive signs as highlighted by the report, such as the significant price rallies of Bitcoin (BTC) and Ether (ETH) since the start of the year. Whether this is enough to bring more venture dollars back to the space, only time will tell.

In a different report published by Galaxy Research on April 11, the firm looked at the broader amount of VC investment into all crypto companies over the past 12 months. In a similar vein to the recent trend in Web3 funding, the report indicated that the $2.4 billion invested into all crypto firms in Q1 2023 marked an 80% decline from the $13 billion recorded in Q1 2022. Notably however, while capital investment plummeted significantly YoY, the report showed that the number of VC crypto deals had increased by around 20% in Q1 2023 compared to Q4 2022.

The head of firm-wide research at Galaxy, Alex Thorn, stated that historically, venture activity has tracked crypto asset prices pretty closely. Therefore, it will be interesting to see if crypto VC activity can rebound if prices remain resilient or constructive this year, despite the many macro and monetary headwinds.

In conclusion, the decline in Web3 startup funding is a significant concern for the industry. However, there are positive signs as highlighted by the report, such as the significant price rallies of Bitcoin (BTC) and Ether (ETH) since the start of the year. The rise in crypto asset prices could encourage more investment in Web3 startups in the future, especially if investors believe in the potential of these companies to disrupt traditional industries.

It’s worth noting that Web3 technology is still in its infancy, and many companies are still trying to figure out how to apply this technology to real-world use cases. As such, there is a certain level of risk involved in investing in Web3 startups, and many investors may be hesitant to take on that risk, especially given the current economic climate.

Furthermore, the decline in Web3 funding is not limited to this sector alone, as venture funding is down in almost every industry. The decline in VC investment is attributed to various factors such as inflation, supply chain disruptions, and global economic uncertainty. This has led many investors to be cautious with their investments, especially when it comes to early-stage companies.

Despite the challenges, there are still many reasons to be optimistic about the future of Web3 technology. The potential use cases for blockchain technology are vast and varied, ranging from supply chain management to digital identity verification, and many companies are working on innovative solutions to address these issues.

Moreover, the rise of decentralized finance (DeFi) has demonstrated the potential of blockchain technology to revolutionize the financial industry. As more people become aware of the benefits of DeFi and Web3 technology, it’s possible that we may see a resurgence in VC investment in this space in the coming years.

In conclusion, the decline in Web3 startup funding is undoubtedly a cause for concern, but it’s important to remember that this technology is still in its early stages. As the industry matures and more companies develop innovative solutions, we may see a renewed interest in Web3 startups from investors. Furthermore, the rise of DeFi and the increasing mainstream acceptance of cryptocurrencies could lead to a resurgence in VC investment in the Web3 space in the future.

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African Blockchain Ventures See Explosive Growth

by Blockchain News

Blockchain technology is making waves across the African continent, as it continues to provide fertile ground for the growth and implementation of this cutting-edge technology. According to the African Blockchain Report 2022 by Crypto Valley VC, the funding for blockchain deals in Africa raised a whopping $474 million in 2022, representing a staggering 429% increase in African blockchain venture funding. This surge in funding for African blockchain ventures outpaced the global average of only a 4% increase in blockchain funding.

The report revealed that African blockchain funding demonstrated a growth rate that was over 12.5 times higher than that of general African venture funding on a year-on-year basis. Specifically, African blockchain ventures raised $474 million through 2022, reflecting a 429% increase in funding. In contrast, overall African venture funding saw a 34% increase, with $3.14 billion raised across 570 deals during the same period.

Africa experienced the highest growth rate in funding among all regions, with Seychelles and South Africa responsible for 81% of the blockchain venture funding in Africa, having raised $208 million and $177 million, respectively. This can be attributed to the fact that the number of African blockchain deals increased by only 12% year-on-year, from 26 to 29, indicating that the median deal size has significantly risen. This suggests that businesses are securing more substantial funding, and investors are becoming more confident in African blockchain ventures.

In the past year, Nigerian blockchain startups raised the highest number of deals in the continent, followed by South Africa, Seychelles, and Kenya. However, despite Nigeria’s high number of deals, it only accounted for 3.4% of all African blockchain venture funding, with an average deal size of $1.25 million.

Meanwhile, the United States remained steady at $15.2 billion in funding, while Asia and Europe saw a year-on-year increase of 50% and 35%, respectively, with $4.74 billion and $4.88 billion in funding. African blockchain venture funding made up 1.77% of global blockchain venture funding, which saw an impressive 407% year-on-year increase, with several countries contributing to the surge. In comparison, the US concluded 137 deals, while Asia and Europe had 84 and 78, respectively.

Overall, the remarkable growth in African blockchain ventures indicates a promising future for the industry in the region. As more businesses secure larger investments, and investor confidence grows, the African blockchain industry is poised for continued success and innovation. With Nigeria leading the charge in the number of blockchain startups receiving funding, the future looks bright for African blockchain ventures.

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Nigerian Crypto Startup Lazerpay to Shut Down Operations

by Blockchain News

Lazerpay, a Nigerian start-up that was established in October 2021 by Emmanuel Njoku, Abdulfatai Suleiman, and Prosper Ubi, has decided to discontinue operations since it is unable to get sufficient finance. Njoku announced the news on April 13 through a message that he posted on Twitter. In the statement, he expressed his thanks for the relationships that were created and the influence that Lazerpay had on the cryptocurrency ecosystem. He went on to highlight that the new company had worked very hard to keep the lights on, but unfortunately, they had reached a point where they needed to close its doors.

This announcement comes only a few short months after Lazerpay announced layoffs in November 2022. Those layoffs were also ascribed to the startup’s failure to secure money after the withdrawal of a main investor. According to Njoku, despite the obstacle, Lazerpay has already onboarded more than 3,000 firms and handled more than one million dollars in transactions.

Lazerpay has urged that merchants take their cash from the platform before the deadline of April 30, 2023, utilizing the bank or cryptocurrency payment options. This will enable a smooth transition for Lazerpay’s customers. The company has declared that it will refocus its efforts on fixing any unresolved concerns. In addition, the company is in the process of soliciting proposals from other businesses interested in purchasing its intellectual property.

Lazerpay was developed to encourage widespread use of cryptocurrencies and to assist companies in accepting stablecoin payments from clients located all over the globe. The failure of the venture to get sufficient finance ultimately resulted in the company’s demise, which represents a big loss for the African cryptocurrency market.

The closure of Lazerpay is the most recent event in a string of disruptions that have occurred in the African cryptocurrency market. Paxful, a peer-to-peer marketplace for Bitcoin transactions, also announced last week that it would be closing its doors. Notwithstanding this, a few crypto payment firms on the continent, such as NairaEx, which is a functioning Bitcoin exchange in Nigeria, are nevertheless doing rather well.

Despite the fact that Lazerpay has shut down, Njoku and the other co-founders of the company continue to have a positive outlook on the future of cryptocurrencies in Nigeria and Africa. They have expressed their conviction that the African continent has a significant amount of untapped potential for innovation and development in the cryptocurrency industry.

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Bitget Launches Web3 Fund

by Blockchain News

Bitget, a cryptocurrency exchange, has established a Web3 Fund to provide financial assistance to venture capital businesses and projects all over the globe that are Web3-friendly. The exchange will give priority to Asian initiatives that are headed by competent teams and have clear roadmaps, with an emphasis on finding solutions to challenges that exist in the real world. Gracy Chen, managing director of Bitget, has underlined the exchange’s dedication to make Web3 a worldwide phenomenon, just like Web2 was. Web2 was a sensation that spanned the whole globe. The objective of the Bitget Web3 Fund is to identify those initiatives that will have the greatest possible influence on the procedure.

Foresight Ventures, ABCDE Capital, SevenX Ventures, and DAO Maker are just few of the venture capitalists that may be interested in participating in this endeavor as possible partners. Another prospective partner is Dragonfly Capital, which has just made an investment of $10 million in Bitget to assist the company’s continuous worldwide development.

Over 80,000 traders and 380,000 replica traders have joined Bitget since the platform’s inception in 2018. The exchange has ambitions to extend the goods it offers in 2023, including spot trading, launchpad, and Bitget Earn. Bitget has just just paid $30 million to purchase BitKeep, a Web3 access gateway that has more than 9.5 million customers.

Bitget established a fund with a capitalization of $200 million during the bear market that occurred in 2017 in order to protect the assets of its customers and regain the trust of investors. The value of the fund was guaranteed to be preserved by the exchange for a period of three years. Additionally, throughout the course of the previous year, Bitget instituted stringent Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures in order to prevent dishonest individuals from using its services.

The fact that Bitget has decided to establish a Web3 Fund is evidence of the company’s dedication to fostering growth within the Web3 ecosystem. The exchange intends to discover and support initiatives that have the potential to have the most significant influence on making Web3 a phenomenon on a worldwide scale, and it will do this with the assistance of its possible partners. Bitget’s goals for development through the year 2023 demonstrate the company’s commitment to satisfying the ever-evolving requirements of its client base while also preserving its position as a market leader in the cryptocurrency exchange field.

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Arbitrum Foundation Under Fire for Selling ARB Tokens Before Budget Ratification

by Blockchain News

The Arbitrum Foundation’s recent decision to sell ARB tokens for stablecoins before the ratification of its nearly $1 billion budget has sparked a governance crisis. The Foundation’s actions raise concerns about the efficacy of community governance models and the power dynamics between centralized organizations and decentralized ecosystems.

In a recent blog post, Arbitrum employee Patrick McCorry explained that the Foundation believed its omnibus governance package, Arbitrum Improvement Proposal (AIP-1), served as a “ratification” of decisions it had already made, including receiving 7.5% of all ARB tokens. As a result, the Foundation began using these tokens for the DAO’s operational purposes.

Arbitrum attempted to empower its community by airdropping over 1 billion ARB governance tokens to nearly 300,000 wallets as part of its community governance efforts. The first critical decision was AIP-1, covering governance, emergency powers, funding, and grants. However, McCorry pushed back against the perception that token holders had a say in the matter, stating that the point of AIP-1 was to inform the community of decisions that had already been made.

The controversy erupted after governance hawks pointed out the Foundation’s “special grants” program, which proposed that the Foundation would receive 750 million ARB tokens (around $1 billion) to spend without the approval of token holders. The tide of votes in favor of ratification shifted to rejection, creating uncertainty around what would happen if AIP-1 is defeated.

McCorry’s post adds to the governance crisis by introducing the “chicken and egg problem” of setting up decentralized governance structures. Certain parameters must be decided ahead of time, such as the structure of a “security council” that wields emergency powers, voting mechanics, and funding. According to McCorry, these blank check powers are fundamental to the ecosystem’s competitive edge and are necessary to attract partnerships with traditional companies.

In conclusion, the Arbitrum Foundation’s decision to sell ARB tokens before budget ratification highlights the power dynamics at play in decentralized ecosystems. The situation calls into question the efficacy of community governance models and raises important considerations for centralized organizations in the decentralized world.

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Tomi Raises $40M for Decentralized Web Alternative

by Blockchain News

Tomi, a decentralized cloud computing network, has announced that it has raised $40 million in a funding round led by DWF Labs, Ticker Capital, and Piha Equities, as well as Japanese crypto investor Hirokado Kohji. Tomi aims to provide an alternative to the traditional internet by creating a decentralized autonomous organization (DAO) that governs a “surveillance-free alternative” to the internet. The funding will be used to attract publishers and further develop its network.

Tomi was launched in 2022 by an anonymous group of crypto industry veterans who sought to create a version of the internet governed by a DAO. The tomiDAO is responsible for network governance, including voting on code alteration proposals and managing content that violates community guidelines.

The spokesperson for Tomi clarified that all monetization efforts on the network are facilitated through the network’s native token, TOMI. The token is used as the primary currency for various activities within the network, such as buying domains, paying transaction fees on tomi’s layer-2 network, and participating in voting activities.

Decentralized autonomous organizations (DAOs) are blockchain-based entities with no central ownership that are governed by self-organizing communities. Their utility has grown over the years as more organizations look to implement bottom-up decision-making without hierarchical management. The Marshall Islands have recognized DAOs as legal entities, making them more accessible for organizations to adopt.

Decentralizing the internet can enhance digital ownership by promoting open services powered by decentralized apps instead of centralized applications controlled by major technology companies. This push for decentralization is currently being led by Web3 companies that have raised billions in venture capital to advance their version of Web3.

Tomi’s project seeks to provide an alternative to the tech titans and re-educate the masses that they can have control again. The network’s surveillance-free nature appeals to content creators looking for a more secure and decentralized platform to share their content. Tomi’s unique approach to decentralization through its DAO and native token could disrupt the centralized nature of the internet, empowering users and promoting digital ownership.

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Gate.io to Launch Crypto Exchange in Hong Kong Following Government’s $6.4M Investment in Web3

by Blockchain News

Following the announcement that the Hong Kong government intends to infuse 50 million Hong Kong dollars ($6.4 million) into Web3 as part of the city’s budget for the 2023-24 fiscal year, cryptocurrency exchange Gate.io is getting ready to build a presence in Hong Kong.

On February 22nd, Gate Group announced that it would be applying for a cryptocurrency license in Hong Kong, which will enable it to establish “Gate HK.” Hippo Financial Services, the local subsidiary of the corporation, was awarded a license in August 2022 to allow it to offer custody services for virtual assets.

In a budget address on February 22, the Hong Kong finance secretary, Paul Chan, pledged financing relating to Web3 as well as the formation of a crypto task force. This news comes at the same time.

He went on to say that Web3 had “great potential,” and that the Special Administrative Region of China is obligated to keep up with its “constant growth.”

“It is imperative that we stay current with the times and make the most of this priceless chance to drive innovation forward.”

Chan said that the monies will be used to expedite “the growth of the Web3 ecosystem” by organising “workshops for young people,” holding international seminars, and boosting commercial collaboration.

Because of the legislation that the government has enacted around cryptocurrencies, he said that a “big number” of businesses are contemplating opening up shop in the city. Dr. Han Lin, the founder of Gate Group, referred to Hong Kong as both “a worldwide strategic market” and a “hub” because of its “industry-leading regulatory system.”

On February 20th, Hong Kong announced its intentions, which included a new licensing framework as well as a proposal to provide retail traders access to approved cryptocurrency platforms.

Chan has said that he “will organize and head a task force” on the creation of virtual assets in response to the surge in commercial interest. This task force will be comprised of individuals from financial regulators, market actors, and “relevant policy bureaux.”

According to Chan, the purpose of the task group is to “offer suggestions on the sustainable and responsible growth of the industry.”

In October, Hong Kong launched crypto-friendly policy frameworks in an effort to govern the business inside the city. This was the first step in the city’s quest to achieve status as a worldwide centre for the cryptocurrency industry.

The city’s unique status enables it to have its own laws and government, despite the fact that it is located inside a territory that is part of China. However, there are reports that authorities in Beijing are covertly supporting the region’s crypto aspirations. This would appear to be in contradiction to China’s prohibition on cryptocurrencies, but the push that Hong Kong is making in the cryptocurrency space.

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The Development of Blockchain Chips

by Blockchain News

The use of blockchain technology is on the increase, and the majority of businesses are investigating the technology in some form. As blockchain technology grows more widespread, users of all stripes will want access to the possibilities offered by this platform in the most effective manner possible.

The development of blockchain chips as energy-efficient accelerators is one of the measures that have been taken as a result of this. Chain Reaction, a blockchain chip business located in Tel Aviv, said on February 23 that it has funded $70 million in order to grow its technical staff in preparation for the development of its next chip.

According to Alon Webman, co-founder and CEO of Chain Reaction, the new chip will be a “completely homomorphic encryption” device. This kind of chip would allow the user to continue working on data even while the chip is in the process of encrypting it.

“Today, if you have data (which) is encrypted into the cloud, and in order to perform any data operation or data analytics, or do A.I., you need to decrypt the data,” said the researcher. “This is a must.”

He went on to explain that governments and big companies, such as the military industry, that may use cloud services but are now barred from doing so owing to worries about security.

“As soon as the data is encrypted, it is vulnerable to assault by a hostile person who may read it, steal it, or even modify it.”

A chip that is encrypted and also provides access to data that is encrypted might be helpful in this situation. According to Webman, Chain Reaction anticipates releasing that chip as soon as the year 2024 comes to a close.

According to Webman, Chain Reaction plans to begin mass manufacturing of its existing blockchain chip, Electrum, in the first quarter of 2023. This information comes from Webman. The chip was developed to facilitate hashing in a speedy and effective manner. Additionally, it has applications in the mining of several cryptocurrencies.

The software maker Intel also introduced a blockchain chip created by Nvidia in February 2022. This chip was meant to speed up energy-intensive blockchain operations that demand enormous quantities of computational power.

Additionally, Nvidia has a dedicated processor designed just for the mining of Ethereum.

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Bosch and Fetch.ai to Create Foundation to Fund Development of Web3

by Blockchain News

A grant program with a budget of one hundred million dollars will be made available as a result of the partnership between Bosch and Fetch.ai. Everyone will be welcome to participate in this endeavor. The initiative will provide financial assistance in order to promote research into the development of decentralized technologies, in addition to Web 3 and artificial intelligence (AI).

The Fetch.ai Foundation is an organization that will aim to promote the general adoption of innovative technologies such as artificial intelligence, cutting-edge software, and Web3 technologies in the corporate sector. The establishment of the Fetch.ai Foundation is a joint project that is being worked on by both of the firms as part of their combined efforts. The mission of this foundation will be to increase the adoption rate of the aforementioned technologies. This initiative will not only give financing for research, but it will also facilitate the development of decentralized technologies that have the potential to be used in the real world.

Fetch.ai, a startup company with offices in Cambridge, Massachusetts, is currently in the midst of developing a decentralized machine learning network. Artificial intelligence is the major focus of the company’s research and development efforts. They have been putting in the work to bring this project to a successful end, and they have been doing it in collaboration with the multinational engineering and technology business Bosch. The latter business provides a broad variety of Internet of Things (IoT) solutions and counts assisting in the development of artificial intelligence (AI) powered gadgets and home appliances as one of its key strategic goals. The firm also offers a wide range of IoT solutions. Additionally, the firm offers a wide range of Internet of Things (IoT) solutions. The group is looking at the possibilities of incorporating Web3 technology into this ongoing endeavor as a possible new component of this ongoing project.

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