AWeb3VC - Funding Round Up #42

🗓️ Week of: Oct 15-21, 2023

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

$108M+ was raised across 19 funding rounds in Web3. Slight improvement in funding for October. Notably, the number of Series A and beyond stage deals that accounted for over half of this week's deal flow. It remains to be seen whether this is indicative of a revival in the Web3 venture market. Yet, with the growing speculation around the Bitcoin spot ETF potentially obtaining approval in the upcoming months, we're seeing liquidity gradually return to the crypto markets. This might be bolstering confidence among investors and adjacent venture investors, particularly in Web3 segments like Financial Services (i.e., CeFi) and DeFi. Both have seen an uptick in funding and their underlying businesses stand to benefit the most should crypto markets rally in 2024.

Confidence also seems to be growing in the M&A market. Over the past month, there has been an uptick in transactions. A particularly notable deal was the $50M acquisition of the institutional-grade tokenization platform, Securrency, by the Depository Trust & Clearing Corporation (DTCC). Moreover, this deal underscores the potential buy-side exit opportunities presented by traditional finance (TradFi) acquirers. For a deeper dive into the state of the crypto M&A markets, check out Architect Partners M&A Insights.

🏆 Largest Funding Round

➡️ SynFutures closed $22M in Series B funding led by Pantera Capital, with participation from Susquehanna International Group (SIG) and HashKey Capital.

SynFutures is a decentralized derivatives exchange that enables anyone to list and trade futures and perpetual futures on any asset. The platform seeks to democratize the digital asset derivatives market by employing an Amazon-like business model, equipping users with the necessary tools to freely trade any asset and instantly list any futures contracts, provided there's a reliable price feed. Liquidity providers can make markets in a matter of seconds. Having been deployed on multiple blockchains, SynFutures is currently the largest derivatives exchange on Polygon and ranks within the top three most frequented decentralized derivatives exchanges.

Additionally, the platform recently unveiled its V3, which featured the launch of the Oyster Automated Market Maker (AMM), which also combines an order book entirely on-chain. Other enhancement to the protocol included a margin management and liquidation framework created specifically for derivatives, a consolidated liquidity system and the implementation of an exponential moving average procedure to offer advanced financial risk management mechanisms.

Why this matters?👉Ever since FTX's downfall last year, traders have been actively seeking alternative venues for futures and perpetuals. Although the market remains concentrated on CeFi exchanges, there's a noticeable shift towards decentralized exchanges due to their non-custodial advantages. SynFutures has already amassed over $10 billion in lifetime trading volumes across its V1 and V2 protocols, consistently recording daily trading volumes exceeding $20M. With its robust liquidity and the ease it offers users in creating markets for any token, SynFutures is increasingly positioned as the preferred choice for decentralized derivatives.

😎 Noteworthy Company

➡️ Elixir is a decentralized protocol that unlocks open participation in market making on both centralized (CEX) and decentralized exchanges (DEX). The protocol algorithmically deploys supplied liquidity onto order books, using the order book equivalent of x*y=k curves to enhance liquidity and tighten the bid/ask spread.

Elixir is fully composable. It allows orderbook-based DEXs to natively integrate Elixir into their core infrastructure. This integration facilitates exchanges and protocols in easily bootstrapping liquidity into their order books. Additionally, the protocol lets crypto projects incentivize liquidity for their CEX pairs using LP tokens. To date, Elixir has over 20 native integrations with the core infrastructure of leading DeFi DEXs and boasts more than 60 protocols committed to using Elixir for market making on CEXs.

Recently, Elixir closed a $7.5M Series A funding round, achieving a $100 million valuation. The round was led by Hack VC, and saw participation from NGC Ventures, AngelList Ventures, Bloccelerate VC, and other distinguished angels. Earlier this year, the project also announced a $2.1M Seed round.

Why this matters?👉Elixir provides a unique solution to bridge CEX and DEX order books, fostering increased market depth and liquidity across DeFi markets. This approach is already gaining traction, as evidenced by several DEXs starting to integrate the protocol. Moreover, it's also noteworthy to see the project progress from Seed to Series A in less than 12 months. This demonstrates that despite the challenging Web3 venture landscape in 2023, venture investors are still deploying capital, especially for projects that are clearly exhibiting product-market fit.

💸 Funding Rounds

Top 15 Rounds

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All Rounds

Noahswap - Strategic ($3M) | Non-performing crypto asset restructuring and trading platform: https://www.noahswap.io/home

VirgoCX - Series A+ ($3.7M) | Cryptocurrency and trading platform focused on the Canadian market: https://virgocx.ca/

Myshell - Seed ($5.6M) | Decentralized and integrated platform for discovering and creating AI-native apps: https://myshell.ai/

Squads - Strategic ($5.8M) | Multi-signature wallet protocol focused on the Solana ecosystem: https://www.sqds.io/

Celestia Labs - Series B (Not Disclosed) | Layer 1 blockchain network with modular data availability: https://celestia.org/

Life Beyond Studios (aka. Darewise Entertainment) - Private Sale ($3.5M) | Metaverse gaming platform where players embark on a journey to build a new civilization: https://darewise.com/

Fileverse - Seed ($1.5M) | Privacy enhanced file sharing and collaboration platform: https://fileverse.io/

Elixir - Series A ($7.5M) | Automated market maker protocol across centralized and decentralized exchanges: https://elixir.finance/

Forge - Seed ($11M) | Gaming platform that allows gamers to aggregate their gaming life and achievements into a single profile, and earn rewards: https://forge.gg/

Globacap - Series B ($21M) | Capital markets technology company that digitizes and automates the world’s private capital markets: https://globacap.com/

Ryder - Seed ($1.2M) | Seed phraseless hardware crypto wallet: https://www.ryder.id/

SynFutures - Series B ($22M) | Decentralized derivatives exchange that enables anyone to list and trade futures and perpetual futures on any asset: https://www.synfutures.com/

Beluga - Seed ($4M) | Platform that onboards and guides new users on their crypto journey with tools and educational resources: https://heybeluga.com/

Coin Metrics - Series C+ ($6.7M) | Provider of crypto asset market and network data: https://coinmetrics.io/

Takadao - Seed ($1.6M) | Community owned blockchain based financial services featuring savings and loans products and cooperative life insurance: https://takadao.io/

TG.Casino - Public Sale ($1.3M) | Telegram based casino and anonymous crypto gambling platform: https://tg.casino/

Third Time Entertainment - Seed+ ($2M) | Game studio and developer of virtual horse racing game : https://thirdtimegames.com/

Upland - Series A+ ($7M) | Metaverse and virtual property trading game based on real-world addresses: https://www.upland.me/

Chintai - Strategic (Not Disclosed) | One-stop capital markets solution for digital asset issuance, secondary trading, automated compliance, cap table management, reporting, and custody: https://chintai.io/

New Funds

No new funds announced this week

🙌 Cool Resources

Crypto Fund Research provides insight and analysis on cryptocurrency hedge funds and venture capital funds. In addition to providing the most complete database of cryptocurrency and blockchain investment managers, Crypto Fund Research conducts in-depth industry research reports. This includes a recent report on crypto hedge fund flows, which noted investors withdrew more than $160M in Q3-2023 despite most funds outperforming Bitcoin by almost 6%.

🐕 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.