AWeb3VC - Funding Round Up #25

🗓️ Week of: June 18-24, 2023

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

$128M+ was raised across 24 funding rounds in Web3. Despite yet another uneventful week for funding in Web3, crypto markets are rallying! BTC has reached its 2023 all-time high (ATH) with ETH following a similar trajectory as interest and bullish sentiment return to the crypto markets. If the Crypto Price-Innovation Cycle framework holds true, this could be promising news for Web3 ventures in the coming months. This uptick follows on the heels of BlackRock’s plans to launch a Bitcoin ETF, along with a series of announcements from leading TradeFi companies about their strategies to further integrate with crypto… I wouldn’t be surprise if the next wave of Web3 funding goes to startups with a flavor of TradeFi.

🏆 Largest Funding Round

➡️ Galaxy Finance announced a $30M Series B funding round. Investors in this round include BlackPine, QCP Capital, and Tally Capital. The company's core product is a Web3 wallet that can store digital assets, including cryptocurrencies and NFTs. The wallet also provides social and educational features within the application, enabling users to better navigate crypto markets and Web3. Galaxy Finance has plans to expand its support for additional blockchain networks and integrate with multiple decentralized exchanges (DEXs). It aims to provide aggregation features across various DeFi platforms. The company's primary user base is currently concentrated in the Southeast Asian market.

Why this matters?👉Once again, we encounter another company that has secured significant funding, but has limited information available to adequately detail the venture. The fact that no mainstream outlets are covering the deal, beyond some guest blog posts, only raises questions about the legitimacy of the funding round. For a Series B , one would expect more publicity 🚩

Putting this aside, the deal does underscore the growing adoption of crypto in Southeast Asia. While Singapore often steals the spotlight as the region's financial hub, crypto adoption is swiftly spreading throughout other countries as well. For example, Vietnam reportedly has the highest proportion of crypto ownership relative to its total population. With potential regulatory challenges looming for crypto in the U.S., Southeast Asia certainly offers promise for any company or project focused on expanding their user base.

😎 Noteworthy Company

➡️ EDX Markets, launched earlier this week, is new digital asset exchange designed to meet the needs of both crypto-native firms and the world’s largest financial institutions. The exchange is unique in that it is non-custodial, meaning it doesn't handle customer funds and mitigates potential conflicts of interest. Instead, it serves as a marketplace where trusted institutional counterparties can negotiate prices and execute trades. Initially, the platform will only support four cryptocurrencies: Bitcoin, Ether, Litecoin, and Bitcoin Cash. Furthermore, the platform will only be available to institutional clients.

The company is also planning to launch EDX Clearing later this year to settle trades matched on EDX Markets. The clearinghouse will facilitate trades against a central counterparty, allowing participants to benefit from enhanced price competition and reduced settlement risks, while increasing operational efficiencies.

One of the notable aspects of EDX Markets is its backing by a consortium of major financial institutions. Founded in the fall of 2022, the company has received funding from Charles Schwab, Citadel Securities, Fidelity Digital Assets, Sequoia Capital, Paradigm, and Virtu Financial. Moreover, it recently closed another round of funding, bringing on additional strategic investors including Miami International Holdings, DV Crypto, GTS, GSR Markets LTD, and HRT Technology. Several of these strategic investors not only plan to use the platform, but some have already begun executing trades.

Why this matters?👉Despite recent regulatory pressure from the SEC, EDX signals that institutional investors are still seeking trusted trading partners for digital assets. With major names in TradFi, including two of the largest market makers in the world (Citadel and Virtu), EDX could potentially become one of the most robust trading venues out there, offering the deepest liquidity. EDX might provide the long-awaited on-ramp to usher TradFi into crypto markets, something the industry has been eagerly anticipating. However, it's worth recalling the trajectory of Bakkt, originally founded by ICE (the parent company of the NYSE), which had similar exchange aspirations before it eventually pivoted its entire busines

s model. Nonetheless, EDX will be a good barometer to measure if the TradeFi narrative actually has some real legs.

👀 Observations, Trends & Themes

➡️ The TradeFi Shift

Recent weeks have witnessed a significant shift in the crypto industry, with major traditional finance (TradFi) players confidently stepping into the space. Bitcoin surged past $30,000 for the second time this year, propelled by bullish market sentiment and bolstered by the increased involvement of TradFi giants.

This was initially triggered by BlackRock's filing for a spot Bitcoin ETF, quickly followed by similar filings from Invesco and WisdomTree. Additionally, rumors abound that Fidelity may soon apply for its own Bitcoin ETF, or could possibly be in talks to acquire Grayscale, one of the largest crypto asset managers currently in the space. The TradFi shift was further evidenced by the recent launch of EDX Markets (as we previously covered) and banking heavyweight Deutsche Bank announcing that it had applied for a digital asset custody license in Germany.

Despite regulatory concerns, particularly in the U.S., the push into crypto by these major TradFi players has prompted a positive shift in the market and is seen as a vote of confidence for the asset class and industry. More importantly, these developments could also be advantageous for crypto-native firms. Some of these TradFi players might consider partnering with or acquiring promising crypto companies as a way to fast-track their crypto-related offerings. This could encompass anything from trading platforms to digital asset management and custody solutions.

While these developments still face approvals, ultimate execution, and adoption, I definitely take this a positive signal for what is to come for the industry in the years ahead 🚀

➡️ 420 Million Crypto Users

According to data from the crypto payment gateway, Triple-A, an estimated 420 million people around the world are using or owning crypto as of June 2023. If these statistics are accurate, over 4% of the world’s population already has some exposure to the crypto ecosystem. These are significant numbers for any crypto projects and companies evaluating their serviceable addressable markets (SAM), especially considering that the total population of crypto users now exceeds that of the U.S. Interestingly, the region with the largest number of crypto users is Asia, with 260 million people, followed by North America with an average of 54 million.

💸 Funding Rounds

Top 15 Rounds

Note: Maverick Protocol latest funding round was included in Round Up #24

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

All Rounds

Vantient - Seed ($4.5M) | Web3 customer relationship management (CRM) solution: https://www.vantient.io/

INX - Private Placement ($5.3M) | Regulated trading platforms for digital securities and cryptocurrencies: https://www.inx.co/

Cat Paradise - Seed ($1M) | GameFi platform for cat lovers built on the TON network: https://www.catparadise.io

Portal Gate - Seed ($1.1M) | Decentralized dark pool and DeFi infrastructure solution based on zero-knowledge (ZK) technology: https://www.portalgate.me/

Galaxy Finance - Series B ($30M) | Web3 wallet with educational and social elements: https://galaxyfinance.io/

Bracket Labs - Seed (Not Disclosed) | DeFi derivative primitive designed to simplify traditional options and leveraged structured products: https://bracketlabs.fi/

DappOS - Seed (Not Disclosed) | Operating protocol designed to lower the barriers of interacting with crypto infrastructure using account abstraction and its own network to bridge transactions across DApps and chains: https://dappos.com/

Kryptoskatt - Seed (Not Disclosed) | Crypto tax platform that helps users with cryptocurrency tax calculations, reporting, and portfolio management in multiple countries: https://kryptoskatt.com/

Mind Network - Seed (Not Disclosed) | Decentralized zero trust data lake built using Adaptative Fully Homomorphic Encryption (AFHE) to secure user data, smart contracts, and AI on Web3: https://mindnetwork.xyz/

zkPass - Seed (Not Disclosed) | Composable, privacy-preserving identity protocol based on Multi-party Computation (MPC) and Zero-knowledge (ZK) proofs enabling users to prove their verifiable data to third parties: https://zkpass.org/home

Arkon Energy - Debt ($26M) | Data center infrastructure company that uses renewable power to run Bitcoin mining operations: https://www.arkonenergy.com/

Parfin - Strategic (Not Disclosed) | Modular platform for secure digital asset custody, trading, and asset management: https://parfin.io/en/

EDX Markets - Strategic (Not Disclosed) | Digital asset marketplace designed to meet the needs of both crypto native firms and the world’s largest financial institutions: https://edxmarkets.com/

Open Foodie - Seed ($500K) | Web3 creative-based cartoon food manufacturing lab also developing community-driven art and culinary carnivals: https://openfoodie.io/

dtcpay - Seed+ ($16.5M) | Payment service provider offering solutions to merchants to accept fiat and cryptocurrency payments: https://dtcpay.com/

Earn Network - Seed ($2.7M) | Liquid marketplace for yield earning opportunities by enabling liquidity providers & pool creators in a completely non-custodial manner: https://earn.network/

Neutron - Private Sale ($10M) | Permission-less smart contract platform for interchain DeFi, powered by Tendermint and built with the Cosmos SDK: https://neutron.org/

Drest - Seed ($19.1M) | Interactive luxury styling game: https://drest.com/

Northstake - Seed ($3M) | Intuitional focused and regulatory compliant staking platform: https://www.northstake.dk/

Vertex Protocol - Private Sale (Not Disclosed) | Decentralized, cross-margined, orderbook exchange built on Arbitrum: https://vertexprotocol.com/

Kaito - Series A ($5.5M) | AI-powered search engine for crypto and Web3 that takes multiple sources of unstructured information and turns it into actionable insights for investors, researchers, developers, and the general public: https://www.kaito.ai/

Anichess - Seed ($1.5M) | Decentralized blockchain based chess game built in partnership with Animoca Brands (via Lympo) and Chess.com: https://anichess.com/

Radius - Seed ($1.7M) | Trustless shared sequencing layer and cross-rollup interoperability enabled by zero-knowledge (ZK) technology: https://www.theradius.xyz/

XPLA - Private Sale (Not Disclosed) | Content-driven, universal gaming

and entertainment focused Layer 1 blockchain network developed by Team C2X: https://xpla.io/

New Funds

No new funds this week.

🙌 Cool Resources

The Value Prop is a crowd-sourced and open database, created to showcase the diverse and unique use cases for blockchain technology – across all networks. The database is developed and maintained by Polygon Labs and was launched in June 2023.

🐕 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.in