Venture capital firms are showing increasing interest in cryptocurrency startups, with investments increasing significantly in February.
CryptoBriefing reports that cryptocurrency startups received $485 million in funding last month, citing data from DefiLlama. This is a 5.3% increase from the previous month and the largest investment in the last quarter.
A significant portion of the capital, amounting to $387 million, was allocated to infrastructure-related startups. The most notable investment was by a16z, which invested $100 million in EigenLayer in a private funding round. This was the largest venture capital allocation to a cryptocurrency startup in February.
EtherFi, a liquidity staking platform, also secured a notable investment of $27 million in its Series A round. This round was led by Bullish and CoinFund.
Additionally, payments platform Oobit successfully completed its Series A funding round, receiving $25 million. This round was led by Tether and CMCC Global.
Decentralized finance (DeFi) projects attracted more than $48 million in investments during the same period. Superform Labs, which aims to develop a universal yield market, has raised $6.5 million in a seed round led by Polychain Capital.
Omega’s plan to build a DeFi ecosystem on top of Bitcoin received $6 million in a private round with donations from Borderless Capital and Blockchain.com.
Web3-centric applications have also attracted investor attention, securing nearly $18 million in February. Beoble, which develops web3 messaging apps and social platforms, received the largest investment in the sector, with $7 million from companies including Samsung Next and Hashkey Capital.
The gaming sector was not left behind, with $33 million being poured into new game studios. Gaming studio Helika has raised $8 million in a Series A round led by Pantera Capital. Another significant investment was in web3 game Pixelmon, which raised $8 million from Animoca Ventures and Delphi Ventures.
In early September, Colleen Sullivan of Brevan Howard Asset Management’s cryptocurrency venture division acknowledged the potential of blockchain technology in gaming.
But she also pointed to current limitations, particularly throughput issues with networks like Solana, which can only handle about 2,000 transactions per second. According to Sullivan, this capacity is considered insufficient to host high-quality gaming experiences on-chain.
Despite February’s robust activity, the broader PitchBook data for October indicates a slowdown in cryptocurrency market investment.
In the third quarter of 2023, venture capitalists invested $2 billion in cryptocurrencies, a 63% decrease from the same period in 2022. As PitchBook analyst Robert Le points out, this decline in funding levels is due to lower deal sizes. .