AWeb3VC - Funding Round Up #28

🗓️ Week of: July 9-15, 2023

Also be sure to follow me on Twitter @aweb3vc 🚀

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

$154M+ was raised across 27 funding rounds in Web3. July has been off to a slow start, which isn't surprising given that venture deals generally slow down during the summer. Despite this, we're starting to see an uptick in Series A funding, and this week we recorded deals across almost all categories within Web3.

Funding news aside, the week's most significant event comes from Ripple and their longstanding court battle with the SEC over XRP. In short, token sales to investors are considered securities sales, but open market transactions are perfectly legal. While the dust still needs to settle, this is a major milestone for the industry, potentially providing some clarity over the status of tokens under securities law. If this holds true, it could be one of the most pivotal moments for Web3 venture, ushering in a new wave of projects and deals. This verdict certainly casts a more optimistic outlook for the industry in the years to come!

🏆 Largest Funding Round

➡️ Sound.xyz Sound.xyz closed $20M in Series A funding, led by a16z, with participation from Palm Tree Crew, Scalar Capital, A Capital, Collab + Currency, Sound Ventures, Coop Records, Archetype, Crush Ventures, Coinbase Ventures, and Snoop Dogg.

Sound is a Web3 music platform that provides artists and fans a platform to interact directly, bypassing traditional intermediaries like record labels and streaming platforms. Songs stream for free on the platform and users curate their own playlists. Artists can debut songs along with a series of limited-edition NFTs, and listeners can collect directly from the creator and leave a public comment on the songs they own. Each artist (not the platform) sets the terms of their relationship with supporters through unique, customizable digital item drops powered by smart contracts. Since its inception, Sound.xyz has onboarded over 500 artists, generating more than $5 million in revenue.

Why this matters?👉Disintermediating the music industry continues to be a leading use-case for Web3. While Sound is not the first Web3 music platform enabling artists to launch music NFTs, it's one that has demonstrated significant traction, having paid out over $5M to artists to date. With over 500 artists onboarded on the platform, it's still far from reaching the scale of Spotify. However, if the platform can continue to provide meaningful payouts to artists, there's a good chance it will develop a powerful flywheel effect, potentially emerging as an alternative music streaming platform in the years to come.

😎 Noteworthy Company

➡️ Opolis is a member-owned digital employment cooperative that provides crypto-friendly payroll, employment benefits, tokenized rewards, and membership perks to independent workers in both Web2 and Web3. The platform strives to democratize employment by empowering freelancers to experience the freedom and flexibility of being independent while still enjoying the security and employment benefits of a traditional corporate job.

Opolis was founded by John Paller, a technology entrepreneur with 20 years in the HR technology, compliance and employment systems. John is also the founder of ETHDenver, the largest and longest-running Web3 innovation event in the world. Recently, the DAO announced $6.6M in funding led by Greenfield with participation from NEAR Foundation, Draper Associates, and Polygon Ventures.

Why this matters?👉The jury is still out on whether DAOs can scale. However, it seems that legacy cooperatives might be the primary beneficiaries of a DAO organization and governance structure. Employment cooperatives, which are long-standing organizations, have historically benefited from a self-managed structure. As such, employment co-ops like Opolis provide promising examples of how DAOs could potentially operate at scale.

👀 Observations, Trends & Themes

➡️ Ripple’s Case vs the SEC

In probably the biggest news of the week, in a recent court ruling, Ripple won a partial victory in its ongoing legal dispute with the U.S. Securities and Exchange Commission (SEC) over its XRP tokens. The U.S. District Court of the Southern District of New York decided that Ripple's sale of XRP tokens on exchanges and through algorithms did not constitute investment contracts, thus not violating federal securities laws. However, the court ruled that Ripple's direct sales of XRP to institutional buyers, hedge funds, and other parties did constitute an unregistered offer and sale of investment contracts, thereby violating securities laws. Decision still subject to appeal by the SEC and Ripple is not out of the woods when it comes to fines, but this seems like the beginning of the end for the SEC’s legal theories around Crypto tokens.

To help further breakdown this recent development, implications, and analysis, here are 2 great tweet threads:

💸 Funding Rounds

Top 15 Rounds

Note: Alluvial announced a previous Seed round as part of its Series A announcement

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

All Rounds

Narval - Seed ($4M) | Unified wallet governance and management platform for organizations: https://www.narval.xyz/

Crust Network - Private Sale (Not Disclosed) | Decentralized cloud storage protocol designed to incentivize the creation of storage orders and usage of storage nodes on the IPFS network: https://crust.network/ 

NeoKe - Seed ($1.4M) | Digital identity for travelers verified identity using blockchain technology: https://www.neoke.com/ 

Alluvial - Seed ($6.2M) | Developer of Liquid Collective, an enterprise-grade liquid staking protocol: https://alluvial.finance/ 

Alluvial - Series A ($12M) | Developer of Liquid Collective, an enterprise-grade liquid staking protocol: https://alluvial.finance/ 

Ambient Finance (fka. CrocSwap) - Seed ($6.5M) | Decentralized exchange (DEX) protocol that allows for two-sided automated marketing making (AMM) inside a single smart contract: https://us.ambient.finance/ 

Gondi (Florida Street) - Seed ($5.4M) | Decentralized non-custodial NFT lending protocol: https://www.gondi.xyz/ 

Olympix - Seed ($4.3M) | Web3 security operations tool that offers a static analyzer and utilizes a proprietary Large Language Model (LLM) to identify vulnerabilities: https://www.olympix.ai/ 

AwesomeQA - Seed ($2.8M) | AI driven customer support and community management solution for Web3 businesses: https://home.awesomeqa.xyz/ 

Giza - Seed ($3M) | Decentralize machine learning inference for Web3 applications built on StarkNet using Zero-Knowledge (ZK) proof technology: https://www.gizatech.xyz/ 

Gamecraft - Seed ($5M) | Web3 and AI-driven, skill-based competitive gaming and tournament platform: https://gamercraft.com/ 

Get Protocol - Seed ($4.5M) | NFT ticketing solution provider and data standard for NFT proof of access: https://www.get-protocol.io/ 

Sound.xyz - Series A ($20M) | Web3-native music streaming platform: https://www.sound.xyz/ 

LunarCrush - Series A ($5M) | Social intelligence platform for cryptocurrency markets powered by artificial intelligence and machine learning to analyze data from dozens of sources: https://lunarcrush.com/ 

KTX.Finance - Seed ($4M) | Decentralized spot and perpetual exchange built on the BNB Chain: https://ktx.finance/ 

Aretla - Seed ($6M) | Layer 1 blockchain network that empowers developers to add user-defined native extensions and build feature-rich DApps: https://www.artela.network/ 

Aark Digital - Seed (Not Disclosed) | Peer-to-Pool perpetuals decentralized exchange (DEX) built for professional traders: https://aark.digital/ 

Primal - Seed ($1M) | Suite of social network applications built on the Nostr protocol: https://primal.net/home 

Xterio - Strategic ($15M) | Global, cross-platform play-and-earn developer and publisher: https://xter.io/ 

Roi - Seed ($3.6M) | All-in-one portfolio manager to track investments, trade across brokerages or crypto wallets, and discover new investment opportunities: https://getroi.app/ 

Opolis - Private Sale ($6.6M) | Member-owned digital employment cooperative that provides crypto-friendly payroll, employment benefits, tokenized rewards, and membership perks to independent workers in both Web2 and Web3: https://opolis.co/ 

Ion Protocol - Seed ($2M) | Collateralized Debt Position (CDP) issuer, designed to accept deposits in different types of Liquid Staking Tokens (LSTs) and staked asset-backed positions: https://www.ionprotocol.io/ 

Patex - Strategic ($10M) | Layer 2 blockchain network ecosystem targeting Latin America and development of CBDC's: https://patex.io/ 

AGII - Private Sale ($15M) | Decentralized generative AI platform: https://agii.app/ 

MetaCene - Seed ($5M) | Blockchain based massive multiplayer online role playing game (MMORPG): https://metacene.io/ 

Silent Protocol - Private Sale ($5M) | Protocol that enables pseudonymous full-stack privacy for smart contract assets and web3 applications at scale: https://www.silentprotocol.org/ 

Karta - Seed ($1.1M) | Metaverse studio focused on in-game experiential marketing: https://www.karta.game/ 

New Funds

No new funds this week.

🙌 Cool Resources

LunarCrush is a social intelligence platform for cryptocurrency markets powered by artificial intelligence and machine learning to analyze data from dozens of sources. At its core the platform unites social media sentiment and realtime data to deliver insights into cryptocurrency markets.

🐕 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