AWeb3VC - Funding Round Up #61

🗓️ Week of: Feb 25-March 2, 2024

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

$215M+ was raised across 45 funding rounds in Web3. This week saw a surge in deal flow, with the total number of announced deals reaching its second highest level within the past 18 months. This may be due to the timing of announcements coinciding with the major ETH Denver conference. However, there could certainly be a correlation as crypto markets reach their highest levels since 2021 and show no signs of slowing down, providing an optimal environment for venture funding. If a16z’s Price-Innovation Cycle holds bearing, 2024 could shape up to be another exciting year for Web3 venture.

🏆 Largest Funding Round

➡️ Avail announced $27M in seed funding in a round led by Founders Fund and Dragonfly. The round also saw participation from SevenX Ventures, Figment Capital, Nomad Capital, and a number of angel investors. The project originally spun out of Polygon in March 2023 and is led by Polygon co-founder Anurag Arjun and Prabal Banerjee.

Avail is a modular blockchain infrastructure focusing on the unification of Web3. Its architecture is centered around the Avail Trinity, which includes three core components: Avail DA, Avail Nexus, and Avail Fusion (Security), aiming to enhance the scalability, interconnectedness, and security of Web3.

Its first component, Avail DA, is a highly optimized base layer protocol, specifically constructed for data availability. This layer is designed with minimal functionality besides offering secure block space to layer 2 networks and handling transactions faster and cheaper. Avail Nexus is a proof aggregation and sequencer for zero-knowledge rollups on top of Avail DA, allowing for cross-rollup and cross-ecosystem communication and settlement within the Avail ecosystem. Finally, Avail Fusion Security enables a basket of tokens (e.g., BTC, ETH, and others) to pool their crypto-economic security to contribute to the Avail consensus and secure the Avail network, employing a method inspired by emerging protocols like EigenLayer, Babylon Chain, and Osmosis.

Why this matters?👉 Data availability layers are increasingly positioning themselves as critical infrastructure as the sprawling landscape of Layer 2 networks and rollups continues to grow. Avail aims to harmonize this fragmentation by providing its own lightweight data availability layer and interoperability solution among the hundreds of rollups. If the future of Web3 is modular, Avail could position itself as a new foundational layer for future blockchain and DApp development.

😎 Noteworthy Company

➡️ Backpack is an ecosystem of products highlighted by the Backpack Exchange, Backpack Wallet, and Mad Lads, one of the top NFT collections in the Solana ecosystem. The company is also the creator and developer of Anchor, the Solana smart contract framework, which introduced the executable NFT (xNFT) token standard.

Originally known as Coral, the company played a pivotal role in developing developer tools for the Solana ecosystem, including Anchor and the innovative xNFTs, which allowed for mini-decentralized mobile applications accessible via the Backpack Wallet. In September 2022, they raised $20M in an initial round of funding, led by FTX Ventures. However, they soon found themselves in a precarious position when 80% of their operating capital was reclaimed due to FTX's bankruptcy, forcing the company into "cockroach mode."

Despite these challenges, Backpack launched the Mad Lads NFTs in April 2023, which quickly became one of the top NFT collections within the Solana ecosystem. The NFT sale not only showcased the Backpack Wallet, which unlocked features of the NFTs, but crucially provided the necessary working capital for the company’s ultimate goal of building a new cryptocurrency exchange in the aftermath of FTX's collapse.

The Backpack Exchange was launched in October 2023, after obtaining a virtual-asset service provider license in Dubai. The exchange has since reported to reached over 420,000 verified users globally and over $6 billion in trading volume in February 2024. Its core features include self-custody of customer funds via multiparty computation (MPC) wallets and a distributed database system akin to a permissioned blockchain, documenting the complete history of the exchange's transactions.

Backpack was founded by Armani Ferrante, Tristan Yver, and Can Sun, all former employees of FTX and Alameda Research, who left before the collapse of both firms. The company recently announced a $17M Series A funding round led by Placeholder, with participation from Hashed, Robot Ventures, Amber Group, Wintermute Ventures, Selini Capital, Delphi Digital, and founders of leading Solana-based applications. This round valued Backpack at a $120M post-money valuation.

Why this matters?👉 Backpack's story is one of startup lore, initially becoming collateral damage of FTX's collapse, then surviving, and now filling the void left by FTX. With the crypto markets currently enjoying the fruits of a bull market, exchanges like Backpack stand to benefit from growing trading volumes and transaction fees. Furthermore, Backpack offers a diverse product suite and a loyal community (via Mad Lads), which provide a solid foundation for future product innovation and a robust channel for customer acquisition. With FTX gone and Binance facing reforms, Backpack certain as an opportunity to become a leader within the international crypto exchange market.

💸 Funding Rounds

Top 15 Rounds

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All Rounds

New Funds

MNNC Group - Multiple Funds (Not Disclosed)

🙌 Cool Resources

Chainalysis 2024 Crypto Crime Report

🐕 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.