In the midst of the bear market, Web3 startups raised $7.1 billion

In 2022, Web3 startups have attracted some of the highest profile venture capitalists on the planet, including investment banks such as Morgan Stanley and Goldman Sachs. Most of the fundraising has been led by cryptocurrency investment funds such as Binance Labs, Coinbase Ventures, and Kraken Ventures.

While the bear market was in full swing, 348 Web3 startups raised a total of $7.16 billion in 2022. According to a report from the magazine Metaverse messagethis figure is almost double the amount raised in 2021.

The startups that have attracted investors come from a variety of industries, including gaming, the metaverse, social media, virtual reality and artificial intelligence. Similarly, several sub-sectors of the cryptocurrency market have successfully attracted capital in 2022.

In the second quarter of 2022, metaverse projects and games raised several million dollars. “Subsequently, venture capitalists moved into Play-to-Earn games, paying particular attention to blockchain casinos, collectibles, loot boxes, and soccer-related games,” the report said.

Artificial intelligence, a sector that makes investors dream

During the last quarter of 2022, investors turned their attention to Web3 startups specializing in augmented, virtual and mixed reality. Artificial intelligence applications, such as the ChatGPT robot, have also attracted a lot of interest from venture capitalists.

For example, InworldAI raised $50 million in a Series A funding round, while SEED raised $41 million. Similarly, SingularityDAO and MarqVision have raised $25 million and $20 million respectively in their funding rounds.

“Venture capitalists are unlikely to lose interest in artificial intelligence (AI) in 2023. More AI startups are expected to secure funding,” the report reads. Metaverse message.

Likewise, given the surge in crypto hacks and scams, investors are focusing more on securing the crypto ecosystem. As a result, the total investment received by Web3 startups specializing in blockchain infrastructure has increased significantly in 2021.

These Web3 startups that seduced investors

Topping the list is video game studio Epic Games, which raised $2 billion from Sony and KIRKBI. Epic Games intends to use these funds to “achieve its vision of the metaverse and support its growth”. Currently, the company is valued at $31.50 billion.

Subsequently, Yuga Labs, the parent company of Bored Ape Yacht Club (BAYC), has raised over $400 million to develop its Otherside metaverse. Given the tremendous success of its NFT collection, Yuga Labs is now one of the most coveted Web3 startups among investors.

Animoca Brands, a startup focused on the metaverse, also entered the top 3. It is followed by Immutable, a Layer 2 platform based in Sydney. Second Metaverse messagemost of the investments come from four venture capitalists.

Who are the biggest supporters of cryptocurrencies?

Paradigm, a San Francisco-based investment firm, has become the most active investor in the Web3 world. In 2022, the company distributed a $2.50 billion envelope across 31 crypto projects, including Coinbase, Uniswap, Magic Eden, and Optimism.

With a total investment of $2.20 billion, Andreessen Horowitz (a16z) became the second most active venture capitalist after Paradigm. The fund is followed by HiveMind Capital Partners who have invested $1.5 billion in Web3 startups. Finally, Binance Labs came in fourth place with a total investment of $1 billion.

While profitability is at the rendezvous, losses are also part of the game: for example, the bankruptcy of the hedge fund Three Arrows Capital (3AC) has earned its investors several million dollars. Not to mention the FTX crash that reverberated throughout the cryptocurrency market.

While venture capitalists have the wherewithal to make up for their losses, the average investor has only eyes to cry. Hence the need to carefully study the projects in which we invest.