AWeb3VC - Funding Round Up #15

🗓️ Week of: April 9-15, 2023

Also be sure to follow me on Twitter @aweb3vc 🚀

💡Web3 Funding Snapshot

(See "Funding Rounds" section for the complete list of deals)

Last week, $207M+ was raised across 31 funding rounds in Web3. While this is the fifth lowest week of funding in 2023, I'm personally not fazed, given some of the exciting developments we witnessed via a16z's State of Crypto report and the release of Solana's Saga smartphone, which I cover further in this week's roundup. Additionally, Bitcoin and Ethereum crossed major price milestones, hitting $30K and $2K respectively, which could signal brighter times ahead for the markets overall and hopefully Web3 venture🤞

🏆 Largest Funding Round

➡️ EOS Network announced an investment from digital asset market maker and investment firm DWF Labs. The deal consisted of two components: a $45M private token sale, as well as a $15M pledge to invest in businesses and projects within the EOS ecosystem. DWF will also form an alliance with the EOS Network Foundation (ENF), which is responsible for facilitating the EOS ecosystem's growth and community development.

EOS is a layer 1 blockchain network originally developed by Block.one and formally launched in June 2018. It was one of the first networks to implement a delegated proof of stake (DPoS) consensus mechanism, as well as parallel processing capabilities for transactions. This allows the blockchain to handle higher transaction volumes, capable of processing thousands of transactions per second. The blockchain also supports smart contract development, which has led to a number of decentralized applications and games being built on top of the network. EOS is also set to unveil its own enterprise-grade EOS Ethereum Virtual Machine (EVM) later in April

Why this matters?👉 EOS — now that's a blast from the past! At one point, its token had a market capitalization of over $17B and was one of the top 10 cryptocurrencies. Now, while still a top 50 token, interest and development on EOS have significantly dropped. Thus, it's interesting to see this push to bolster future development within their ecosystem, especially before they roll out their EVM. We'll see if this comeback story has legs…🦵

We also see DWF Labs pop up again. Not only did they announce the EOS investment, but they also made four other investments this past week on top of 20+ so far in 2023. While it’s been amazing to see an active capital allocator emerge, it hasn’t come without any controversy. In response to an outpouring of criticism and speculation on social media, DWF Labs' managing partner and founder, Andrei Grachev, shared a blog post attempting to provide further transparency into their vision and investment thesis. It’s a bit difficult to judge if these guys are "real," but you can't blame anyone trying to scoop up discounted tokens while the market is recovering. I think some of the confusion around DWF stems from understanding the difference between which investments are associated with their market making vs venture arms. Only time will tell how DWF’s story will play out...At least these guys aren’t operating an exchange… Alamenda/FTX…cough 🫣

😎 Noteworthy Company 

➡️ Sei Labs is building a Layer 1 blockchain called Sei Network, which is designed specifically for DeFi and digital asset trading. Unlike other general-purpose blockchains, Sei focuses on optimizing every layer of the blockchain stack to offer the best infrastructure for trading applications of all types. Sei was originally built using the Cosmos SDK and Tendermint core but has been modified to offer specialized functionality and optimizations. This includes using a Twin-Turbo consensus mechanism and multiple degrees of parallelization to help reduce latency and improve throughput, offering up to 20,000 transactions per second (TPS) with 500 milliseconds of finality. It also offers a central limit order book (CLOB) and a native matching engine, making it an attractive infrastructure for decentralized exchanges (DEXs) to be built on top of it.

The network is currently operating in a public testnet. So far, it has reported that 120 projects are building on the blockchain, with about 3.6M unique users, and 35M transactions processed on the testnet since opening in March. Last week, the company announced $30M in funding, which reportedly valued the company at $800M. Investors in the round included Jump Crypto, Distributed Global, Multicoin Capital, Asymmetric Capital Partners, Flow Traders, Hypersphere Ventures, and Bixin Ventures. Additionally, Sei Labs has plans to launch a $50M ecosystem fund to help further development within their ecosystem.

Why this matters?👉Exchanging is fundamental to digital assets. However, building an exchange on blockchain technology comes with several limitations related to decentralization, scalability, and capital efficiency. Infrastructure like Sei makes significant leaps to create higher-performing and more efficient trading venues on-chain, specifically for DEXs. Recently, DEXs continue to grow in popularity, with the largest DEX, Uniswap, surpassing centralized exchanges like Coinbase by total daily trading volumes. Thus, if Sei can position itself as the new standard for exchange protocols, the sky's the limit 🚀

👀Observations, Trends & Themes

➡️ State of Crypto 2023

Andreessen Horowitz (a16z) released its second annual State of Crypto report. I highly recommend reading it in its entirety, but as a TL;DR, the report reflects a healthier industry than market prices may indicate, backed by a growing active user base, active developers holding steady, new technological breakthroughs (highlighting zero-knowledge systems), and with DeFi and NFT activity rising again.

The report also emphasizes the "price-innovation cycle," an observation that prices and development activity are intertwined in a positive feedback loop. When crypto prices rise, more people get interested and join in. The attention, in turn, inspires (and funds) new ideas, startups, and projects, some of which lead to greater adoption in the long term. This positive feedback loop has held true since Bitcoin's creation in 2009 and appears to be going strong based on a16z's 2023 observations.

The other highlight of the report is the introduction of the State of Crypto Index, an interactive tool to track the health of the crypto industry. The index reflects the forces of innovation (supply) and adoption (demand) that drive crypto's market cycles. This is a great way to keep track of the overall industry on a real-time basis, and I've also included it within this week's "Cool Resources" section.

Lastly, I noticed that the report did not aggregate and include data on Bitcoin. Rather, it appears that all of their underlying data sources (primarily Nansen) only included Ethereum and other Layer 1 blockchain networks. While I'm sure this will tick off a bunch of Bitcoin Maxis, it actually means the figures could suggest a more conservative estimate on the industry’s progress, which is certainly something to be bullish on when we look at overall adoption.

I may regret saying this, but I think the toughest days are rapidly moving behind us...

➡️ Web3's Mobile Native Moment

ICYMI, the creator of the Solana blockchain, Solana Labs, has officially launched their long-awaited Saga smartphone. The Android-based phone will cost $1,000 and will ship this May.

One of its key features is a device-native seed vault, which secures users' wallet seed phrases (i.e., private keys) within a secure environment on the phone. Think of having a hardware wallet built directly into your device that can seamlessly work with your browser.

Saga also introduces the Solana Mobile Stack (SMS), a lineup of custom add-ons that integrates crypto into the phone's hardware and software, offering a truly mobile-native Web3 experience. Included is a custom “DApp store” that will offer dozens of applications covering crypto trading, inter-wallet communications, music, and NFTs.

Whether you're a Solana fan or not, this is a huge leap forward for the industry. Until now, most of Web3 has been dominated by desktop user experiences. If the industry is ever to capture billions of users in adoption, it needs to offer a mobile-native experience and provide crypto “in your pocket”. Thus, while I'm sure Saga will have its setbacks, kudos to them for swinging for the fences to push our industry forward and reining in the next user interface for Web3.

I highly recommend you check out the video from the launch event. However, if you can't watch the full video, here are a few moments that got me really excited:

Demo of native seed vault (16:42); Dialect, offering Web3 native messaging (22:09); The DApp store (32:50); Decentralized carrier offered by Helium Mobile (36:58)

(P.S. I also pre-ordered the Saga phone 😎)

💸Funding Rounds

Top 15 Rounds

Want access to our complete dataset or propose an update? Contact: [email protected]

All Rounds

Gameta - Seed ($5M) | Multi-layered NFT gaming ecosystem providing players with a comprehensive Web3 gaming and entertainment experience: https://www.gameta.pro/#/

CryptoGPT - Series A ($10M) | Zero knowledge (ZK) rollup layer 2 blockchain and a data-to-AI engine, which collects, encrypts and transfers data for commercial applications: https://www.cryptogpt.org/

Fingerlabs - Series A+ (Not Disclosed) | Blockchain development studio and NFT project platform; Subsidary of FSN Co. Ltd: https://fingerlabs.io/

Fire - Seed ($3.5M) | Simulates Web3 transactions, showing you exactly what will enter and exit your wallet before you sign the contract: https://www.joinfire.xyz/

SinVerse Studios - Private Sale (Not Disclosed) | Multi-player city based metaverse game: https://sinverse.com/home

DappBack - Seed ($2.5M) | Codeless self-service platform for Web3 protocols to build customized community reward systems: https://dappback.com/

Mayhem Studios - Series A ($20M) | Web3 game studio of mobile gaming developer Mobile Premier League (MPL): https://underworldgangwars.com/index.html#home

Sei Labs - Series A ($30M) | Layer 1 blockchain network optimized for DeFi built using the Cosmos SDK and Tendermint core, and features a built-in central limit order book (CLOB) module: https://www.seinetwork.io/

RSS3 - Private Sale ($10M) | Information dissemination protocol for Web3: https://rss3.io/#/

Xclaim - Series A ($7M) | Tokenized bankruptcy claims trading market: https://www.x-claim.com/

Pear Protocol - Seed ($1.25M) | On-chain spread trading platform allowing users to create leveraged long and short positions on different assets: https://twitter.com/pear_protocol

Ramper - Strategic (Not Disclosed) | Authentication and key management suite used to simplify Web3 user onboarding: https://www.ramper.xyz/

UXUY - Seed ($3.2M) | Cross-chain liquidity aggregation protocol to seamlessly swap and exchange tokens across multiple blockchain networks: https://uxuy.com/

Chingari - Strategic (Not Disclosed) | On-chain social media app for short-video content: https://chingari.io/

CEBG World - Private Sale ($3M) | Blockchain based online multiplayer battle royale game: https://desktop.cebg.games/home

Absolute Labs - Seed ($8M) | Web3 CRM and marketing automation platform developing a Wallet Relationship Management Platform (WRM): https://absolutelabs.io/

CAT Labs - Seed ($4.3M) | Digital asset recovery and cybersecurity tools used to fight crypto crime including hacks, fraud, and scams: https://catlabs.io/

HUG - Seed ($5M) | Social marketplace that allows artists to sell digital and physical goods, and connects them with current and prospective collectors: https://thehug.xyz/

Mirror World - Seed+ (Not Disclosed) | All-in-one application development platform enabling in-app multi-chain marketplaces, smart authentication, multi-party computation (MPC) wallets, and NFT management: https://mirrorworld.fun/

CryptoTechFin - Seed ($553K) | Investment platform offering packages of indexed algorithms to invest in cryptocurrencies: https://www.cryptotechfin.com/

Intmax (Ryodan Systems) - Seed ($4.88M) | Ethereum layer 2 network based on Zero Knowledge (ZK) rollup: https://intmax.io/

Tonic.xyz - Seed ($5M) | Fine art gallery and community offering highly curated generative art on the blockchain: https://tonic.xyz/

Helio - Seed ($3.3M) | Web3 payment platform enabling merchants and creators to accept crypto payments: https://www.hel.io/

Tradier - Series B ($24.6M) | Full-featured customizable API-based trading platform that supports cryptocurrency, stock and options trading: https://tradier.com/

Taylor & Hart - Strategic ($3.8M) | eCommerce retailer of custom designed engagement rings and diamond jewelry that also allows customers to track diamond's provenance using blockchain technology: https://taylorandhart.com

EOS Network - Private Sale ($45M) | Highly performant open-source layer 1 blockchain platform: https://eos.io/

Particle Network - Strategic (Not Disclosed) | Full-stack, data-driven, and composable Web3 data and development platform in a single workflow: https://particle.network/

Natix Network - Seed ($3.5M) | Crowdsourced camera network creating a real-time map of the world: https://www.natix.network/

Medieval Empires - Private Sale ($3M) | Web3 multi-player online strategy game set in the late 13th century: https://www.medievalempires.com/

Protecc Labs - Seed ($1.5M) | Simplified layer and ecosystem for NFTs: https://twitter.com/Proteccxyz

Pendle - Private Sale (Not Disclosed) | Protocol that allows users to tokenize and trade future income from other DeFi assets: https://www.pendle.finance/

New Funds

Bitget - Bitget Venture Fund ($100M)

Sei Labs - Sei Ecosystem Fund ($50M)

Cool Resources

Check out a16z's State of Crypto Index. This has to be one of my new favorite websites for tracking and quantifying the growth and adoption of Web3.

About

AWeb3VC is a source for venture funding news, emerging startups and trends across Web3. I've been closely following cryptocurrencies and digital assets since 2013 and started working in space since 2018. Now I'm on a mission to build the most extensive venture ecosystem for BUIDLERS in Web3, starting first by tracking those BUIDLERS.