AWeb3VC - Funding Round Up #60

🗓️ Week of: Feb 18-24, 2024

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

$258M+ was raised across 34 funding rounds in Web3. The effects of the latest crypto market bull run are beginning to bear fruit in the Web3 venture market, marked by a solid week of funding news. Both total deal flow and capital raised are up this week as February reaches its close. Already, over $1.2B in capital has been raised since the start of the year, with much of it flowing across all segments of Web3, boasting an average raise of close to $8M. More compelling is the number of Series A and beyond deals popping up week-over-week, signaling that companies and projects are gaining traction post-crypto winter, and investors continue to write checks.

While crypto financial services (i.e., CeFi) and DeFi have been the segments benefiting the most so far in 2024, infrastructure continues its dominance as the segment of choice among investors. In particular, staking infrastructure represents the category's leader, with projects like EigenLayer leading funding this year, which we explore in this edition.

🏆 Largest Funding Round

➡️ EigenLayer announced $100M in Series B funding led by a16z Crypto. The latest funding round comes less than 12 months from the project’s $50M Series A in March of last year.

EigenLayer is a pioneering blockchain infrastructure initiative providing developers with seamless access to the secure and decentralized network underpining Ethereum. At the core of EigenLayer's offerings is a novel protocol that leverages the concept of restaking, a mechanism that significantly amplifies the utility and capabilities of Ethereum's existing security and validator infrastructure.

Through restaking, validators on Ethereum can allocate a portion of their staked ETH to support additional decentralized services, effectively extending Ethereum's functionality without compromising on security or decentralization. This re-staking mechanism not only enhances the security of the network by leveraging the already committed capital and security of underlying blockchains but also opens up avenues for innovative applications and services built on top of this secure layer. This enables the development of diverse protocols across various infrastructure verticals, such as cross-chain messaging, off-chain data access, and more, without necessitating the creation of new chains or tokens. EigenLayer's flagship service, EigenDA, provides a data availability layer that does not require independent consensus to solve.

Why this matters?👉 Restaking offers an opportunity to extend the security and decentralization of Ethereum across a multitude of Web3 use cases and applications, further solidifying Ethereum as the platform of choice for developers. Since launching, EigenLayer has already captured 2.7M in restaked ETH, representing over 2% of ETH’s total circulating supply. It is already fostering an ecosystem on top of it, as seen with AltLayer and restaking DeFi applications. However, while restaking presents several benefits, many have cautioned about the growing systemic risk presented by a shared security model on Ethereum.

😎 Noteworthy Company

➡️ Hack VC is a venture capital firm focusing on early-stage investments in the web3 infrastructure, from protocols to next-gen DeFi, real-world asset tokenization, and projects at the intersection of web3 and AI. The firm is rooted in a thesis-driven investment approach, focusing on projects and companies that provide more secure web3 infrastructure, more capital-efficient and real-world DeFi, and projects at the intersection of web3 and generative AI. Check sizes range from a few hundred thousand dollars to several million dollars. Its portfolio includes Mysten Labs, developer of the Sui blockchain, Consensys, and EigenLayer, among over 80 other investments.

The firm is also an active institutional participant on-chain, providing liquidity into DeFi pools, staking, making open-source contributions, and building tooling for the projects they invest in. This is done via hack.labs(), a team of quant traders, engineers, and researchers who are some of the first users of their portfolio companies’ protocols. Additionally, the firm hosts a global developer community and network events via hack.summit().

Hack VC was founded in 2017 by Alex Pack, a former partner at Dragonfly Capital, and Ed Roman, an angel operator and seed investor. Recently, the firm announced the closure of its first venture-specific fund, raising $150M. This fund complements an initial $200M crypto seed fund that closed in 2022. The firm reports total assets under management (AUM) of approximately $425M across both funds and special purpose vehicles it manages.

Why this matters?👉 Hack VC is among a select group of venture firms that have successfully raised new funds despite the industry's downturn in 2022-23. Limited Partners (LPs) seem to continue favoring firms some sort of demonstrated track record or established reputation over first-time fund managers, as evidenced by new funds announced by Lightspeed Faction (Fund I), CMCC Global (Titan Fund), and Uncorrelated Ventures (Fund III). Since Q4 2023, there has been over $1B in capital announced for new venture funds across fewer than 10 firms. The average size of these funds has been around $100-150M in total capital commitments.

💸 Funding Rounds

Top 15 Rounds

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All Rounds

New Funds

Hack VC - Venture Fund I ($150M)

🙌 Cool Resources

Staking Rewards, the explorer to better understand and navigate the staking industry

🐕 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.