AWeb3VC - Funding Round Up #44

🗓️ Week of: Oct 29-Nov 4, 2023

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

$725M+ was raised across 18 funding rounds in Web3. This week’s dealflow was significantly skewed by Northern Data’s $609M debt financing facility and Animoca’s $50M strategic funding round (as covered later in this post). However, true Web3 venture deals are slowly trending back as we head into the final months of 2023. Projects and companies leveraging zero-knowledge (ZK) proof technology continue to emerge as a promising area in Web3 technology, attracting investors' attention and driving capital inflows to the base protocol and infrastructure segments. Furthermore, broader crypto markets remain resilient amid the ongoing narrative surrounding a potential spot Bitcoin ETF approval and as the US Federal Reserve continues to hold rates. Hopefully, this trend will continue, fostering a more favorable venture market as we head into 2024.

🏆 Largest Funding Round

Note - Deal highlighted as the largest venture style raise this week

➡️ Animoca Brands announced $50M in strategic funding led by NEOM Investment Fund, the strategic investment arm of NEOM. The round was structured in two tranches, with $25M issued in convertible notes and the remaining $25M purchased as shares on the secondary market. Alongside the investment, Animoca Brands and NEOM entered into a strategic partnership focused on driving regional Web3 initiatives in line with the Saudi Vision 2030 plan.

Animoca Brands is a Web3 digital entertainment and gaming company that oversees a broad portfolio of products, games, and intellectual properties. The company leverages blockchain to deliver digital property rights in the form of non-fungible tokens (NFTs) to consumers around the world to help establish the open metaverse. Its portfolio consists of original games such as The Sandbox, Phantom Glaxies, Life Beyond, and Crazy Defense Heroes. It has multiple subsidiaries, and the company is also one of the most active investors in Web3, with a portfolio of over 400 Web3 investments via Animoca Ventures.

Through the partnership, Animoca Brands will work with NEOM on building Web3 enterprise service capabilities, which will be deployed to support technology advancements in Saudi Arabia. NEOM represents a project in northwest Saudi Arabia on the Red Sea, being built as an accelerator of human progress. NEOM will include hyperconnected, cognitive cities, serving as a hub for innovation and entrepreneurship.

Why this matters?👉 Despite the pullback in the NFT market, the waning allure of the metaverse, and its shares trading at a 75% implied discount in July, Animoca Brands remains vital and at the forefront of Web3. Over the past year, the company has taken several measures to spin off underperforming businesses and restructure its cap table. That’s why, while the recent fundraising is branded as a ‘strategic’ round, it's likely serving as an opportunity to bring in fresh capital. This move aims to better position the company in anticipation of the next crypto bull run and the revival of the full potential of Web3.

😎 Noteworthy Company

➡️ Northern Data is a company specializing in the development and operation of scalable infrastructure solutions in the field of High-Performance Computing (HPC). Based in Germany, the company primarily focuses on providing solutions for data centers, which are used for various applications including bitcoin mining, blockchain processing, artificial intelligence, big data analytics, and rendering. Northern Data AG's approach combines software and hardware expertise with an emphasis on energy efficiency, making use of renewable energy sources where possible. The company's business model is designed to cater to the increasing demand for high-performance computing power and consists of three business lines: Taiga Cloud, Ardent Data Centers, and Peak Mining.

Recently, the company entered into a EUR 575M ($609M) unsecured debt financing facility with Tether Holdings Ltd., the developers behind USDT, the industry’s leading stablecoin. The funding is anticipated to be deployed across Northern Data’s business lines. Specifically, it will be used to acquire advanced hardware (NVIDIA A100 and H100 GPUs) to expand its offering as a Generative Artificial Intelligence Cloud Service Provider in Europe, as well as to further scale its Bitcoin mining operations with purpose-built, liquid-cooling mining technology through its mining business, and to enhance its data center capabilities.

Why this matters?👉HPC companies have benefited from the rise of generative AI and the potential next bull market in crypto. Granted, most of these companies' Opex and Capex are directed towards GPU manufacturers like NVIDIA, which stands to benefit the most. Nevertheless, GPUs have become a hot commodity and increasingly high-value collateral. This is why it's also not surprising to see Tether providing secured lending to HPC providers, especially when the stablecoin provider's excess reserves have reached $3.2 billion.

💸 Funding Rounds

Top 15 Rounds

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

All Rounds

Ekubo - Private Sale ($12M) | Automated market maker (AMM) protocol built on Starknet: https://ekubo.org/

Anapaya Systems - Strategic ($1.9M) | Developer of SCION-based networking software and solutions intended to provide secure inter-domain routing: https://www.anapaya.net/

Surf Protocol - Private Sale ($3M) | Permissionless derivative exchange, enabling trading and listing of over 10,000+ assets built on Base: https://www.surf.one/

Animoca Brands - Strategic ($50M) | Web3 digital entertainment and gaming company overseeing a broad portfolio of products, games, and intellectual properties: https://www.animocabrands.com/

Quantum Blockchain Technologies - Private Placement ($2.4M) | Research & Development and investment company focused on innovation in blockchain, cryptocurrency mining and other advanced applications: https://quantumblockchaintechnologies.co.uk/

Vaas - Seed ($2M) | On-chain and off-chain data platform to prevent and detect financial crimes and suspicious activities: https://www.vaas.live/

Waterfall Protocol - Seed+ ($2M) | Scalable smart contract platform based on Directed Acyclic Graphs (DAG) technology and Proof-of-Stake (PoS) consensus: https://waterfall.network/

Valour - Private Placement ($2.2M) | Manager and issuer of digital asset exchange traded products (ETPs) and subsidiary of DeFi Technologies: https://valour.com/

Intract - Seed ($3M) | Web3 community growth platform: https://www.intract.io/

Kana Labs - Seed ($2M) | Cross-chain middleware incorporating chain bridging solutions and liquidity aggregators as well as account abstraction smart wallet SDK: https://www.kanalabs.io/

Toposware - Strategic ($5M) | zkEcosystem, allowing developers to deploy sovereign execution layers and DApps with native interoperability and cryptographic security: https://toposware.com/

Animus Technologies - Seed ($1M) | AI-driven trading strategies for digital assets: https://animus-technologies.com/

Modulus Labs - Seed ($6.3M) | Developer of verifiable AI outputs backed by zero-knowledge proof (ZK) technology: https://www.modulus.xyz/

Intmax (aka. Ryodan Systems) - Strategic (Not Disclosed) | Stateless zero-knowledge (ZK) Layer 2 scaling solution for Ethereum and biometric multiple-party computation (MPC) based wallet: https://intmax.io/

Trips - Seed ($2.5M) | Platform providing content creators establish their copyright's initial digital provenance on-chain: https://tripsip.io/

Northern Data - Debt ($609.8M) | Provider of high performance computing (HPC) solutions used for AI and digital asset operations: https://northerndata.de/

Xage Security - Series B+ ($20M) | Blockchain-based zero trust security platform for the Industrial Internet of Things (IIOT): https://xage.com/

Layer N - Strategic (Not Disclosed) | Hyperperformant rollup network designed to scale financial applications on Ethereum: https://www.layern.com/

New Funds

No new funds announced this week

🙌 Cool Resources

🐕 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.