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- AWeb3VC - Funding Round Up #33
🗓️ Week of: Aug 13-19, 2023
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(See "Funding Rounds" section for the complete list of deals)
$206M+ was raised across 15 funding rounds in Web3. After two weeks of a slump, funding experienced a modest recovery, even though the total number of deals for the week declined. This resurgence was primarily due to BitGo's $100M Series C funding. Beyond the impressive nine-digit funding round, the deal at least offers a glimmer of optimism in the later-stage funding landscape, which has faced challenges for more than a year. Apart from BitGo, two new Layer 1 blockchains, ZetaChain and Linera, also accounted for some of the most substantial announced rounds of the week.
While this week brought some optimism for Web3 venture, the industry witnessed indications that broader challenges might be on the horizon. On the macro level, concerning economic developments in China led to broader market downturns, with risk assets suffering the most substantial blows. Then, after weeks of limited liquidity and overleveraged positions, the crypto markets underwent a flash crash, resulting in the liquidation of over a billion dollars' worth of long positions. Compounding these concerns, investors remain apprehensive about the potential approval of a Bitcoin spot ETF this year. While this might not directly influence venture markets, it could mold the overarching sentiment and the general funding landscape as summer concludes and we transition into Q4.
🏆 Largest Funding Round
➡️ BitGo raised $100M in its Series C funding round, achieving a valuation of $1.75B. The investors participating in this round were not disclosed. However, according to the company's press release, the financing came from “new, external strategic investors.”
BitGo is an institutional digital asset financial services company that offers clients security, custody, and liquidity solutions. It is best known for its custodial services, having pioneered the scalability and commercialization of multi-signature wallet technology. BitGo’s primary custody services now encompass hot, cold, and self-custodial wallets, as well as a "wallet-as-a-service" offering. This service empowers other crypto companies to create and manage wallets for their end-users. In 2018, BitGo introduced BitGo Trust, which paved the way for the company to secure a qualified custody designation through a state banking charter in New York—a milestone it achieved in 2021. Its custody service is viewed as one of the industry's leading platforms, serving over 1,500 institutional clients worldwide and securing roughly 20% of all on-chain Bitcoin transactions by value.
In addition to its custody services, BitGo has also launched prime brokerage services, which provide trading, lending, liquidity, and staking services to institutional clientele. In early 2023, BitGo announced the creation of the BitGo Settlement Network, or Go Network. This platform allows clients to transfer and settle both digital and fiat currencies instantaneously. The network aims to fill the gap left by the closures of SEN and Signet due to the collapse of Silvergate and Signature Bank earlier in the year.
The recent funding news also follows two abandoned M&A transactions involving BitGo. The first was the unsuccessful acquisition attempt of BitGo by Galaxy Digital for $1.2B, which fell apart in August 2022. The second was BitGo's declared acquisition of Prime Trust, which also did not come to fruition after Prime Trust eventually filed for bankruptcy.
Why this matters?👉This news brought a smile to my face😎: a nine-figure, later-stage funding round resulting in a unicorn valuation for one of the industry’s most recognized entities, further supported by impressive traction in 2023.
Source: BitGo Press Release
Not too shabby considering that BitGo was on the verge of selling itself to Galaxy for half a billion less just last year.
Financing for later-stage crypto companies has been challenging. Yet, BitGo's recent funding and other deals observed this year suggest that if a company can thrive even during a crypto-winter, investors remain ready to invest and reward those businesses despite funding and valuations being compressed. Moreover, with the downfall of FTX, crypto-custody has regained its appeal. Over the past year, it seems BitGo and other custodial services have reaped the benefits of this shift.
😎 Noteworthy Company
➡️ Lore (aka. Shuttle Labs) Lore is an AI-enabled blockchain data search engine that utilizes large language models (LLMs) to simplify blockchain comprehension. Its goal is to supplant the existing block data explorer standard by creating a platform that consolidates the diverse landscape of block data into a singular, searchable interface. This aims to make blockchain data more accessible to all stakeholders.
The Lore platform offers multi-chain discovery across all its supported networks through a unified interface. The current iteration of Lore supports searchability across major EVM-compatible networks, including Ethereum, Polygon, Optimism, Arbitrum, and Base.
Recently, the company secured $2.3M in funding, spearheaded by SALT.org. Other investors participating in this round were Arca, Floodgate, and Balaji Srinivasan.
Why this matters?👉As AI and blockchain begin to intertwine, using LLMs to process public blockchain data has emerged as a growing area of natural progression. Despite this potential, sustainable applications of blockchain LLMs remain in their nascent stages, beyond a few "crypto chatGPT" projects. Yet, applications such as Lore exemplify the promising horizon by offering a Google-like interface with analytics capabilities for searching blockchain data. Block explorers are crucial to any network, and with specialized LLMs, end-users can glean deeper insights and value. Given that leading block explorers like Etherscan generate up to $20M/year, the future might hold a meaningful opportunity ahead for Lore.
👀 Observations, Trends & Themes
➡️ Frieds.tech (+ Base)
Web3 social app friend.tech has generated over $3M in protocol fees over the past week, ranking it as one of the top three crypto projects with respect to user-paid fees. The app integrates with X (formerly Twitter) and allows users to trade tokenized shares in one another’s profiles. Since its beta release, the platform has recorded 65,000 unique traders and over 1 million cumulative transactions according to its on-chain data.
Why this matters?👉While it's too early to make definitive claims and the surge might be driven by speculation, friend.tech appears to be gaining traction. It showcases the potential of actual on-chain social networking while also generating significant revenues for the protocol. Furthermore, the fact that the app is built on Base underscores the overall potential of the recently launched Layer 2 blockchain. This could make it a more enticing network for developers and other projects to build upon, especially if there is ways for other apps built on Base to work with friend.tech.
💸 Funding Rounds
Top 15 Rounds
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All Rounds
Affine Protocol - Private Sale ($7M) | Cross-chain protocol and app that allows users to invest in multiple yield generating DeFi protocols, all at once: https://affinedefi.com/
Orange Pill App - Seed ($250K) | Social networking app for Bitcoiners to connect locally: https://www.theorangepillapp.com/
Dinari - Seed ($7.5M) | Securities backed tokenization platform for corporate equities on-chain: https://www.dinari.com/
JKLabs (aka. Jokerace) - Seed ($2M) | Web3 governance platform for Web3 communities to make, execute, and reward decisions while offering incentives to members on-chain: https://jokerace.xyz/
Port3 Network - Seed+ ($10M) | Protocol to aggregate and standardize both off-chain and on-chain data in order to build a social data layer for Web3 that is universally accessible: https://port3.io/
ZTX - Seed ($13M) | Avatar based social network and metaverse platform created in partnership with Zepeto and Jump Crypto: https://ztx.io/
BitGo - Series C ($100M) | Institutional digital asset financial services company that provides clients with security, custody, and liquidity solutions: https://www.bitgo.com/
Linera - Seed+ ($6M) | Layer 1 blockchain network designed to bring the elastic scaling of Web2 to Web3: https://linera.io/
Lore (aka. Shuttle Labs) - Seed ($2.3M) | Blockchain data search engine for on-chain activity enabled by AI: https://www.lorescan.com/
ZetaChain - Private Sale ($27M) | Foundational, public Layer 1 blockchain network that enables omnichain, generic smart contracts, and messaging between any blockchain: https://www.zetachain.com/
AegisWeb3 (aka. PeckShield) - Seed (Not Disclosed) | Web3 security protection products incubated by the blockchain security company PeckShield: https://aegisweb3.com/
Phoenix (aka. Ellipsis Labs) - Seed ($3.3M) | Decentralized exchange and fully on-chain limit orderbook built on Solana: https://ellipsislabs.xyz/
Jada AI - Private Sale ($25M) | Multi industry Artificial General Intelligence (AGI) platform operated in a blockchain-based environment: https://jada-ai.com/
PADO Labs - Seed ($3M) | Developer of Privacy-Preserving Attestation Data Operator (PADO) cryptographic algorithms used to integrate off-chain data with the on-chain decentralized credit protocol: https://www.padolabs.org/
friend.tech - Seed (Not Disclosed) | Web3 social app allows users to tokenize their social network: https://www.friend.tech/
New Funds
🙌 Cool Resources
Check out Carta’s Quarterly State of Private Markets as well as their industry focused addendums. While this looks across ventures in all industries, it provides valuable insights into the general venture environment, especially valuations in 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.