Crypto Companies Raised $2.6B in Q1 2023 But There's a Catch: Report

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Despite declining investment activity for the fourth consecutive quarter, Q1 2023 saw positive outlooks for the crypto space.

A new report by global capital markets data platform PitchBook revealed that crypto-focused companies raised $2.6 billion across 353 investment rounds in the first quarter of 2023.

The amount raised signaled a 12.2% and 11% decrease in the quarter-on-quarter total number of deals and deal value, respectively. It also represented the fourth consecutive quarter of decreasing investment activity, as the amount was the lowest capital invested and deals completed since Q4 2020.that valuation trends were mixed, with seed, late and early-stage rounds at different levels for the quarter. While the seed and late-stage rounds were up 33.

The $2.6 billion raised by startups across 353 deals show a decline of 78% and 64.4% from last year, respectively. The report demonstrates that while the 2022 crypto winter persists, venture capital firms have been able to close many deals and make significant investments in the crypto space.While PitchBook predicted that the decline might likely continue, the firm mentioned some positive incidents in the space in Q1 2023.

Furthermore, PitchBook mentioned Scroll, a company building a zero-knowledge Ethereum Virtual Machine scaling solution, which raised $50 million in a late-stage funding round. Aside from scaling solutions, crypto custodial services also received notable investments as demand for self-custody increased. Hardware wallet manufacturer Ledger$109 million in a Series C extension funding round to optimize and expand its wallet production. The French hardware company, which is behind wallets like Nano S and Nano X, intends to conduct two more rounds before the end of the year.

 

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