AWeb3VC - Funding Round Up #29

🗓️ Week of: July 16-22, 2023

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

$249M+ was raised across 25 funding rounds in Web3. It's good to see funding pick up as we delve deeper into the second half of 2023. This week was largely led by several Series A rounds, signaling that the venture environment is opening up to companies and projects demonstrating traction. The most notable instance was the metaverse platform Futureverse securing funding to further develop their metaverse roll-up strategy. Both Layer 1 and Layer 2 base protocols, built around zero-knowledge (ZK) proof technology, also led the pack in attracting venture funding.

The week also saw numerous developments on the U.S. crypto regulatory front, with a new bipartisan bill being proposed in the Senate, which could have profound impacts on DeFi. The Financial Innovation and Technology for the 21st Century Act was also formally introduced. Additionally, there continue to be promising developments on the blockchain infrastructure front, thanks in large part to Chainlink's CCIP.

🏆 Largest Funding Round

➡️ Futureverse Futureverse raised $54M in Series A funding in a round led by 10T Holdings and included participation from Ripple.

Futureverse is building an immersive and vertically-integrated metaverse platform, while also serving as an AI technology provider (via content generation tools), metaverse infrastructure builder, a creative studio, and digital community all-in-one.

The company is the result of rolling up the 11 metaverse infrastructure and content companies into one collaborative ecosystem. This included the following companies:

• Altered State Machine, leading AI protocol for AI-powered metaverse game characters and content.

• Non-Fungible Labs, creative and engineering studio, designer of ecosystem avatars and world environments.

• Sylo, developer of decentralized communications protocol.

• Centrapay, digital asset payments SDK, enabling Web3 payments in popular global payments networks.

• Centrapass, developer of the decentralized digital identity protocol/SDK and decentralized asset custody protocol.

• Immersve, a multi-chain payment protocol that bridges web3 and metaverse infrastructure with the Mastercard network.

• Shadows Interactive, an LA-based Animation Studio and creator of the Party Bear collection.

• Altered Phoenix, a gaming studio with experience developing gaming titles.

• ATEM Car Club, developer of immersive digital experience centered around car culture.

• Centrality, New Zealand’s leading blockchain tech venture ecosystem.

• DRx, a digital streetwear community developing cutting-edge digitally augmented fashion.

Additionally, Futureverse’s platform leverages the The Root Network, a blockchain and suite of protocols, which is integrated with Ripple’s XRPL, and supports the use of XRP as a gas token as well as the XLS-20 NFT standard.

Why this matters?👉Futureverse is interesting in their roll-up strategy approach to the metaverse. While many Web3 companies slumped post-2022, it presented a prime opportunity for well-capitalized companies to go on a buying spree, which Futureverse appeared to take advantage of. This probably explains why the company was able to raise $50M+ despite the tough funding environment. Even though the metaverse has yet to fully live up to its promise, combining several infrastructure and content components could provide Futureverse a fighting chance to create a destination in Web3 and build a meaningful user base. Interestingly, the platform was built around the Root Network and Ripple’s XRPL, which wasn't necessarily the first blockchain of choice one would think of for the metaverse. I guess we’ll have to see how Futureverse develops over time.

😎 Noteworthy Company

➡️ thirdweb is a comprehensive Web3 development framework that equips developers with everything they need to connect their apps and games to decentralized networks. The platform empowers users to add features such as NFTs, marketplaces, and social tokens to their Web3 projects without writing a line of code. Just as Stripe simplified payments for builders and creators, thirdweb makes Web3 accessible, unintimidating, and easy to navigate.

Since its launch, the company reports that over one-third of all blockchain developers have utilized their products to build Web3 apps across 700+ EVM chains. This has been made possible by offering best-in-class tools, including SDKs in every language, customizable smart contracts, and fully-managed infrastructure services for storage, RPC nodes, authentication, onchain analytics, and more.

Recently, thirdweb announced the acquisition of Paper, enabling the platform to add Web3 wallet creation and payment processing capabilities to their existing blockchain development stack. Paper’s products allow users to create wallets with just an email address, phone number, or social login. They also offer a one-click checkout flow that accepts credit cards (with support for Apple Pay, Google Pay, and others) as well as cross-chain crypto. To date, Paper has onboarded 500K+ people onto Web3, processing over $10M in transactions and working with a diverse range of clients, from Web3-native startups to renowned brands and Fortune 500 companies.

Why this matters?👉By joining forces with Paper, thirdweb now offers a highly robust Web3 development stack. With over one-third of all blockchain developers using their products in some capacity, the platform is rapidly establishing itself as one of the leading infrastructure companies within Web3. Moreover, it primarily offers no-code solutions, making it exceedingly accessible for less technical users to build and develop Web3 applications. I've personally been a significant supporter of this company and will certainly continue to keep a close eye on it, as it has the potential to grow into one of the most valuable companies in the space, especially as its user base expands.

👀 Observations, Trends & Themes

➡️ VC’s to be Held Liable for DeFi Violations

A new bipartisan bill proposed in the U.S. Senate seeks to hold venture-capital firms and other large investors accountable in certain cases for sanctions violations occurring on decentralized finance, or DeFi, platforms. The Crypto-Asset National Security Enhancement and Enforcement Act, introduced on Tuesday, aims to augment the U.S. Treasury Department's capacity to combat money laundering and sanctions evasion by clarifying how these apply to decentralized finance.

Under the bill, liability would be placed on those who control DeFi projects if laws are violated, mirroring how existing traditional financial firms and even casinos face liability for failing to prevent money laundering through their services. If no one controls the DeFi project, then "anyone who invests more than $25M in developing the project will be held responsible."

While the bill still needs to be voted on in the U.S. Congress, it could impose a significant burden on DeFi projects. However, the liability it places on those with substantial stakes in the protocol could adversely affect token holders and deter venture investors. Ironically, this could result in DeFi protocols becoming more decentralized, as no one would want to be a significant token holder of the protocol’s governance tokens.

➡️ Chainlink's Cross-Chain Interoperability Protocol (CCIP) Goes Live

Decentralized oracle network Chainlink launched its Cross-Chain Interoperability Protocol (CCIP). The protocol allows applications to use Chainlink’s Decentralized Oracle Networks (DONs) as facilitators for cross-chain message transfers. This includes operations such as smart contract calls, governance votes, and token transfers. The interoperability protocols is now available for access on Avalanche, Ethereum, Optimism, and Polygon blockchains and had been notable tested by over 25 partners, including decentralized finance protocol Aave and liquidity platform Synthetix.

CCIP plays a key role in Chainlink’s partnership with SWIFT, the international bank payment system. This collaboration aims to incorporate numerous financial institutions within blockchain networks, with SWIFT employing CCIP to connect with different blockchains. The interoperability protocol is expected to be adopted by other leading decentralized finance protocols, thereby extending Chainlink's reach and enabling it to connect multiple blockchain and banking networks.

Blockchain interoperability continues to be a growing area for Web3 infrastructure development. Between LayerZero and now CCIP, various blockchain networks are able to interact further with each other and also bridge transactions with TradFi. Developments in interoperability could potentially expand the depth and reach of decentralized finance.

💸 Funding Rounds

Top 15 Rounds

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

All Rounds

Ethena - Seed ($6M) | Developer of permissionless dollar-denominated savings instruments including US dollar stablecoin and digitally native savings bond: https://www.ethena.fi/

Echooo Wallet - Seed ($15M) | Self-custody smart contract wallet powered by ERC-4337 and leverages multiparty computation (MPC) and AI technologies: https://www.echooo.xyz/ 

Sky Play - Private Sale ($15M) | Player centric Web3 gaming platform and developer of game, Clashrow: http://skyplay.io/ 

PSE Trading - Strategic (Not Disclosed) | Asset management firm offering customized value investment risk management solutions for the global digital asset industry

Futureverse - Series A ($54M) | Immersive and vertically-integrated metaverse platform and content company: https://www.futureverse.com/ 

Kalima Blockchain - Private Sale ($10M) | Low-consumption Layer 1 blockchain dedicated to Industrial Internet of Things (I-IoT): https://www.kalima.io/ 

Otori One - Seed (Not Disclosed) | DeFi platform that enables customizable risk protection solutions: https://www.otori.one/ 

Tromero - Seed ($2M) | Layer 1 blockchain that combines traditional Proof of Work (PoW) consensus with Machine Learning: https://tromero.org/ 

Hexacore - Seed ($3.5M) | Game publisher of open-economy games with digital ownership based on blockchain technology: https://www.hexacore.io/ 

Authic - Seed (Not Disclosed) | No-code NFT marketplace solution enabling brands to create and sell NFTs: https://authic.io/ 

Native - Strategic (Not Disclosed) | Mesh network of programmable, project-owned DEXs connected by a shared liquidity layer: https://native.org/ 

Argo Blockchain - Private Placement ($7.5M) | Global data center business that provides a powerful and efficient platform for cryptocurrency mining operations: https://argoblockchain.com/ 

p0x Labs (Manta Network) - Series A ($25M) | Developer of the Manta Network, a multi-modular ecosystem for zero-knowledge (ZK) applications: https://p0xlabs.xyz/ 

RISC Zero - Series A ($40M) | Layer 1 blockchain using zero-knowledge (ZK) proof technology and RISC-V zkVM, which enables DApps to be programed in Rust, Go, C++, and other languages: https://www.risczero.com/ 

Cosmic Wire - Seed ($30M) | Platform-agnostic blockchain infrastructure including patented volumetric mesh and compression algorithms that enables high-fidelity live streaming of volumetric captured content: https://www.cosmicwire.com/ 

Interface - Seed ($1.4M) | Social app that aggregates wallet's activity across various sources and turns them into a human friendly social feed: https://www.interface.social/ 

WebN Group - Strategic (Not Disclosed) | Incubation hub for fintech and Web3 innovators who are building next-generation, institutional businesses: https://www.wng.co/ 

Radiant Capital - Strategic ($10M) | Cross-chain lending and borrowing protocol powered by LayerZero: https://radiant.capital/ 

Eyeball Games - Seed ($1.5M) | Game studio and creator of Web3 enabled pool game, Eyeball Pool: https://www.eyeball.games/ 

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/ 

MIDAO - Seed ($1M) | Incorporation and legal services for Decentralized Autonomous Organizations (DAOs) and Web3 projects in the Marshall Islands: https://www.midao.org/ 

OpenEx - Seed (Not Disclosed) | Hybrid cryptocurrency exchange integrates centralization and decentralization models: https://www.openex.xyz/ 

Cymbal - Seed ($18.5M) | Human readable Ethereum blockchain explorer powered by AI: https://cymbal.xyz/ 

Side Protocol - Seed ($1.5M) | Layer 1 blockchain that offers a distributed mesh liquidity network system that utilizes innovative inter-blockchain asset exchange application protocols: https://side.one/ 

Over Protocol - Private Sale ($8M) | Layer 1 blockchain based on the protocol "Ethanos" that enables lightweight full nodes: https://www.over.network/ 

New Funds

Mirana Ventures - Mantle Ecosystem Fund ($200M)

Polychain - Ventures IV ($200M)

CoinFund - Seed Fund IV ($158M)

🙌 Cool Resources

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🐕 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.