AWeb3VC - Funding Round Up #46

🗓️ Week of: Nov 12-18, 2023

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

$448M+ was raised across 30 funding rounds in Web3. This week saw a resurgence in deal flow and capital raised. Four companies separately raising over $50M and there continues to be a number of later stage funding rounds starting to reappear.

Financial services (i.e., CeFi) dominated this week as the segment receiving the most funding from investors. Besides offering existing trading, exchange, and custody infrastructure for crypto markets, tokenization services have become one of the fastest-growing sub-categories, increasingly attracting more capital from investors. This trend was highlighted by Superstate (covered in this edition), which has already closed two funding rounds so far in 2023, as well as by Fnality, which is effectively tokenizing interbank settlements on-chain. It's not surprising to see tokenization as a growing focal point, given the broader institutional narrative, which appears to be currently driving crypto markets and likely to offer the industry promise into 2024.

Also notable is the increasing M&A activity so far in Q4 2023. Last week witnessed four announced deals, including Foresight Ventures' acquisition of the crypto media company, The Block. With M&A and later-stage deals starting to resurface, several companies appear to be positioning themselves ahead of what could be an anticipated bull market cycle.

🏆 Largest Funding Round

➡️ Blockchain.com announced $110M in Series E financing round, led by Kingsway Capital. Other investors in the round included Baillie Gifford, Lakestar, Lightspeed Venture Partners, GV (fka. Google Ventures), Access Industries, Moore Capital, Prudence, Freeman Capital, Coinbase Ventures, Pledge Ventures, and others. The company did not disclose the valuation for this round. However, Bloomberg reported, citing familiar sources, that the company's valuation was 'less than half' of the $14B valuation it reached in March 2022 following its Series D financing round. Despite the down round, the company reported approximately 1500% revenue growth over the past four years.

Blockchain.com offers a suite of cryptocurrency services, centered around its popular self-custody cryptocurrency wallet. In addition, the company operates a comprehensive cryptocurrency exchange for buying, selling, and trading various cryptocurrencies, catering to both individual and institutional clients. The platform also provides market lending services to institutional clients and offers data and analytics tools for real-time cryptocurrency market analysis and transaction tracking. Initially, Blockchain.com started by offering the first Bitcoin network blockchain explorer, providing detailed insights into transactions and blocks.

Since its inception in 2011, Blockchain.com has seen over 90 million wallets created on its platform, leading to more than 40 million verified users and facilitating over $1T in crypto transactions. Nearly 33% of all Bitcoin network transactions have been sent or received through a Blockchain.com-managed wallet.

Why this matters?👉Blockchain.com is one of the most longstanding and reputable names in the industry. However, it's not surprising that the company's valuation was cut in half following its last fundraising round in 2022. Most crypto unicorns have seen their valuations discounted by over 60% as the industry restructures and recovers from the events of 2022. Despite facing a down round, it's still a positive signal to see investors' willingness to write larger checks for later-stage crypto companies. Certainly, having fresh capital will help better position the company ahead of the next bull market cycle.

😎 Noteworthy Company

➡️ Superstate is an asset management firm and registered investment adviser modernizing the infrastructure of investment funds. The company specializes in creating regulated investment products that leverage the speed, programmability, and compliance benefits of blockchain technology through tokenization.

Its inaugural product, the Superstate Short-Term Government Bond Fund, is an open-ended mutual fund investing in short-term U.S. government debt. Superstate's offerings stand out due to a secondary ownership record tracked on the Ethereum blockchain via tokenization. Targeted at crypto-native firms, the fund provides these investors with access to tangible assets like government bonds in a manner consistent with their crypto-centric operations, ensuring a regulated, blockchain-based investment.

Founded by Robert Leshner, also the founder of the DeFi lending platform Compound and Robot Ventures, Superstate recently raised $14M in a Series A funding to further develop regulated, on-chain funds. The round was led by CoinFund and Distributed Global alongside Arrington Capital, Breyer Capital, CMT Digital, Department of XYZ, Folius Ventures, Galaxy Digital, HackVC, Modular Capital, Nascent and Road Capital Management. The company also announced its Seed round in June of this year.

Why this matters?👉Tokenization remains one of the most promising use cases for blockchain technology, given its trillion-dollar market opportunity. Thus, we can expect to see more companies like Superstate emerge, either assisting with or issuing their own tokenized assets on-chain. Noteworthy with Superstate is their onshore structure, which serves as a more regulatory-friendly, on-chain investment vehicle for U.S.-based investors. Additionally, it's been under six months since the company raised its Seed round, signaling that the company may have already seen some initial traction with its short-term bond fund.

💸 Funding Rounds

Top 15 Rounds

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

All Rounds

Glacier Network - Seed ($2.9M) | Composable, modular and scalable Layer 2 data network for large-scale DApps: https://www.glacier.io/

Napier - Seed ($1M) | Liquidity hub for yield trading focused on unlocking the full potential of Curve ecosystem: https://napier.finance/

Fanton Fantasy Football - Seed (Not Disclosed) | Play-to-earn (P2E) fantasy football game integreated into Telegram: https://www.fan-ton.com/

Fnality International - Series B ($95M) | Network of decentralized Financial Market Infrastructures (dFMIs) to deliver the means of payment-on-chain in for wholesale banking markets and developer of the Utility Settlement Coin (USC) project: https://www.fnality.org/home

Modhaus - Series A ($8M) | K-pop artist group and agency operated by its fans: https://www.mod-haus.com/

BC Technology Group - Private Placement ($90.6M) | Investment holdings company primarily focused on digital assets and blockchain platforms; Parent company to OSL and SFC-licensed digital asset platform offering institutional brokerage, exchange, and custody for digital assets: https://bc.group/

Kakarot - Seed (Not Disclosed) | zk-Ethereum Virtual Machine implementation written in Cairo enabling Ethereum smart contracts to be deployed on Starknet: https://www.kakarot.org/

Blockchain.com - Series E ($110M) | Digital assets platform that offers ways to buy, hold, and use cryptocurrency and early pioneer of key infrastructure for the Bitcoin community: https://www.blockchain.com/

EthXY - Seed ($1.6M) | Massively multiplayer online role-playing game (MMORPG) built on top of Telegram chat with poker combat mechanics: https://ethxy.com/

Baton - Seed ($4.2M) | Music collaboration protocol and platform: https://www.baton.media/

Credix - Debt ($60M) | Next-generation credit ecosystem, enabled by tokenization and securitization of real-world assets: https://credix.finance/

Arkham - Private Sale (Not Disclosed) | AI-powered blockchain intelligence and data platform that deanonymizes blockchain transactions and provides visualization tools for on-chain activity: https://www.arkhamintelligence.com/

Sei Labs - Strategic (Not Disclosed) | Layer 1 blockchain network optimized for DeFi built using the Cosmos SDK and Tendermint core, and features a built-in central limit orderbook (CLOB) module: https://www.seinetwork.io/

Kinetex Network - Strategic (Not Disclosed) | Decentralized cross-chain trading protocol based on zero-knowledge proofs: https://kinetex.io/

Uniblock - Seed ($2.3M) | Unified Web3 API that connects the most popular blockchain tools and protocols via across platforms: https://www.uniblock.dev/

Superstate - Series A ($14M) | Developer of regulated financial products enabled by blockchain networks: https://superstate.co/

Kinto (aka. Mamori Labs) - Seed ($5M) | KYC'ed Layer 2 blockchain network capable of supporting both financial institutions and decentralized protocols: https://kinto.xyz/

CFX Labs - Seed ($9.5M) | International payments and remittance network leveraging blockchain within a secured closed-loop system: https://www.cfxlabs.com/

Beoble - Seed ($2M) | Communication infrastructure and ecosystem that allows users to chat between wallets: https://www.beoble.io/

Hinkal - Seed ($4.1M) | Zero-knowledge based private smart contract wallet experience: https://hinkal.pro/

Nirvana Labs - Seed ($1.2M) | Web3-native cloud provider designed to reduce cloud centralization and promote decentralized infrastructure: https://nirvanalabs.io/

Taproot Wizards - Seed ($7.5M) | Bitcoin-focused Ordinals project inspired by the original Bitcoin wizard Reddit meme: https://taprootwizards.com/

Shardbound (aka. Bazooka Tango) - Seed ($5M) | Web3 game studio and developer of Shardbound, a zkEVM based collectible tactics game: https://www.shardbound.com/

Rho Protocol - Seed ($2.2M) | On-chain interest rate and swaps market: https://www.rho.trading/

Union Labs - Seed ($4M) | Zero-knowledge based interoperability layer connecting Appchains, Layer 1, and Layer 2 blockchain networks: https://union.build/

Artifact Lab - Seed ($2M) | Developer of universal player profile allowing players to connect all networks they play on and also earn rewards: https://www.gotartifact.com/

BLOCKSMITH - Seed (Not Disclosed) | Web3 developer focusing on NFT technology and blockchain games: https://www.blocksmithand.co.jp/en/

CreateSafe - Seed ($4.6M) | Design and development studio automating the production, distribution and marketing of music IP through digital asset management protocols: https://createsafe.io/

Sleek - Seed ($5M) | Web3 social networking platform supporting both offline and online connections: https://www.sosleek.io/

OMTrade - Seed ($6M) | Crypto exchange for social trading: https://www.omtrade.com/

New Funds

No new funds announced this week.

🙌 Cool Resources

Arkham Intelligence is an AI-powered blockchain intelligence and data platform that deanonymizes blockchain transactions and provides visualization tools for on-chain activity. If you need a resource to analyze blockchain transactions, Arkham provides a powerful tool and is also free to use.

🐕 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 the 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.