Funding was spread across 518 deals and increased by 40.3% from the previous quarter, as per data firm PitchBook
Crypto startup funding rose for a second consecutive quarter to touch $2.4 billion in the first three months of 2024, according to Pitchbook data, as expectations of lower interest rates and the debut of the first U.S. bitcoin spot exchange traded fund whetted investor appetite.
Funding was spread across 518 deals and increased by 40.3% from the previous quarter, as per data firm PitchBook. Global VC investments declined to a near five-year low during the same period.
Investor bets on digital asset startups too have been on a decline since the high of more than $10 billion in the first quarter of 2022, hurt by economic worries and the shutdown of key market players. Nevertheless, the landmark U.S. regulatory approval of spot bitcoin exchange traded funds, which are offered by heavyweights BlackRock and Fidelity, boosted the legitimacy of the asset class and helped send bitcoin to a record high of $73,803 in March.
The recovery in publicly traded tokens and continued rise in institutional adoption will drive higher VC funding, according to Pitchbook analyst Robert Le.
Startups focused on building infrastructure for crypto and blockchain technology led the way in funding during the quarter, according to PitchBook.
The biggest deal was made by decentralized cloud platform Together AI, which raised $106 million in an early stage round led by Salesforce Ventures that valued the firm at $1.1 billion.
The investment rounds have become highly competitive, especially at the early stages, Pitchbook’s Le said.
He added: This is compounded by the fact that early-stage deals are earning higher valuations than late-stage deals, but we will see if this trend holds in the coming quarters.
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