AWeb3VC - Funding Round Up #8

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🗓️ Week of: February 19-25, 2023

Web3 Funding Snapshot

🚀 The Highlights

Last week, a total of over $347M was raised across 50 announced rounds. This marked the third consecutive week of $300M+ funding as we approach a projected $2B aggregate funding for Web3 in 2023. Although infrastructure remains the most funded category, decentralized applications (DApps), decentralized finance (DeFi), and gaming also experienced an uptick in funding last week. As February comes to a close, it remains to be seen how the rest of the year will unfold as many Web3 startups tighten the belt and continue to wait out crypto winter. Only time will tell 🤔

🏆 Largest Funding Round

➡️ Chain Reaction has emerged out of stealth mode and announced that it has closed $70M in Series C funding led by Morgan Creek Digital, with Hanaco Ventures, Jerusalem Venture Partners, KCK Capital, Exor, Atreides Management, and Blue Run Ventures also participating. The Israeli company designs semiconductors and related architectures for use in blockchain and privacy hardware that run cryptographic processes. By using homomorphic encryption, a type of encryption that allows data to be processed without needing to be decrypted first, its hardware is uniquely architected to optimize cryptographic calculation more efficiently, reducing electricity consumption and speeding up computation.

Chain Reaction has been building in stealth mode for over six years. It was founded by former co-founders of Mellanox, which was acquired by Nvidia for nearly $6.9B in 2019. To date, Chain Reaction has raised over $115M and is reported to be valued at $500M following the recent Series C financing.

Why this matters?👉 Better hardware leads to faster computation, which in turn leads to faster transaction processing on-chain. Moreover, more efficient computation can reduce energy consumption and potential carbon impacts. Given the computational intensity of zero-knowledge (ZK) proofs, Chain Reaction's chips and hardware could also potentially be used to further advance ZK technology. Nevertheless, given the founders' history and the its funding to date, this is a company worth keeping a close eye on.

😎 Noteworthy Company 

➡️ Chaos Labs provides on-chain risk optimization and security solutions for decentralized finance (DeFi) protocols. The company has developed a simulation-based risk tooling platform that helps DeFi developers test and optimize their protocols against economic vulnerabilities, market manipulation, black swan events, and other on-chain exploits. Chaos Labs works with some of the top DeFi protocols, including Aave, Chainlink, Uniswap, BENQI, and Osmosis, to secure and optimize their platforms. The company recently raised $20M in seed funding led by Galaxy Digital and PayPal Ventures with participation from other investors, including Hashkey Capital, Lightspeed, Coinbase Ventures, Uniswap, and other who's who investors across traditional VC firms, other Web3 companies, and angel investors.

Why this matters?👉 With billions of dollars of total value locked (TVL) in DeFi protocols, smart contract audits and code peer reviews aren't enough to maintain the safety and soundness of DeFi. Chaos Labs introduces a new layer of risk management for DeFi by offering automated economic scenario-based simulations to proactively adapt to the ever-dynamic crypto markets. Similar to the Comprehensive Capital Analysis and Review (CCAR), which is a type of stress test required annually by banks in the US, Chaos Labs is introducing the same set of resources for DeFi. TradeFi already spends millions to do this, and it wouldn't be a stretch to think smart DeFi projects would do the same to keep users safe. On top of it all, Chaos Labs' Seed round had to be one of the most stacked rounds I've seen in a while. I can speculate the company must be up to some sort of magic considering the level of investor attention despite the tough funding environment.

👀Observations, Trends & Themes

➡️ Coinbase Introduces Bases

Capturing all the headlines this week was Coinbase's announcement of Base, a secure, low-cost, developer-friendly Ethereum Layer 2 (L2) solution. Base will serve as both a home for Coinbase's on-chain products and an open ecosystem where anyone can build.

Here are a few good resources if you'd like to take a deeper dive into Base:

• Base.org (Project's Website)

• Coinbase's Announcement

• News Coverage: CoinDesk, TechCrunch, Cointelegraph

Why this matters?👉 This was the type of good news the industry has been yearning for, despite the ongoing crypto winter. By launching Base, Coinbase will allow developers to directly integrate crypto-native products and provide fiat onramps, tapping into an estimated 110M verified users and $80B in assets within the Coinbase ecosystem. Just imagine the reach and distribution this will offer to projects building new Web3 products in the future.

Base is seen by many as a "massive" vote of confidence for the Ethereum blockchain network, further reinforcing its significance within Web3. Moreover, the platform will be built on top of the Layer 2 network Optimism, which supports the increasing adoption of scaling solutions for Ethereum. These solutions aim to alleviate network congestion and enable faster and more affordable transactions for users. Although Base will rely on Optimism, the Layer 2 ecosystem has become diverse with various available solutions and will likely be the catalyst for new innovation and startups in the years to come.

Funding Rounds

Top 15 Rounds

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

All Rounds

MASVERSE - Seed (Not Disclosed) | Aggregator and ecosystem of various Web3 solutions and services focused on the Malaysian market: https://masverse.tech/home

Million on Mars - Seed ($3.5M) | A web3 play-to-own Martian metaverse game: https://www.milliononmars.com/

Rocket Pool - Strategic (Not Disclosed) | Decentralized Ethereum proof of stake (PoS) staking protocol and pool that also provides liquidity in the form of a liquid staking token: https://rocketpool.net/

Renegade - Seed ($3.4M) | On-chain dark pool that offers traders complete anonymity using zero-knowledge proofs (ZKP) to facilitate the entire trade lifecycle, enabling better pricing and trade execution: https://renegade.fi/

EthSign - Strategic (Not Disclosed) | A decentralized, versioned, integrable everywhere electronic agreement signing platform; Also developer of TokenTable, a platform that helps Web3 projects execute, track, and enforce the agreements a project uses to distribute their tokens: https://www.ethsign.xyz/

Gateway.fm - Seed ($4.6M) | Web3 infrastructure offering staking solutions along with fast, dedicated, cost-effective RPC node service built for scale: https://gateway.fm/

PaprMeme - Seed ($3M) | NFT lending protocol powered by Uniswap V3: https://www.papr.wtf/

Arbitrove - Public Sale ($14.1M) | Index and yield-bearing vault providing diversified exposure to blue-chip tokens natively built on the Arbitrum network: https://nitrocartel.finance/arbitrove

Wonder Strategic International - Seed (Not Disclosed) | Creative studio and developer of IP properties, bringing Asian entertainment and content into Web3; Also subsidiary of Wonder Paradise Pte Ltd: https://wonderparadise.com/

Chainmonsters - Private Sale ($1.5M) | Massive multiplayer online role-playing game (MMORPG) built on the ImmutableX network where users catch, battle, trade, explore, and combine different types of monsters and abilities: https://chainmonsters.com/

Intu - Seed ($2M) | Decentralized account management protocol for any EVM-compatible chain that enables account abstraction using locally encrypted shares: https://intu.xyz/

Chaos Labs - Seed ($20M) | On-chain security platform that enables protocols to create real-world testing environment using scenario-based simulations on mainnet forks, which provides better risk monitoring in real-time before potential vulnerabilities are exploited: https://chaoslabs.xyz/

TipLink - Seed ($6M) | Lightweight digital assets wallet designed to make transferring digital assets as easy as sending a link over any platform (e.g., text, discord, email, etc): https://tiplink.io/

Sentio - Seed ($6.4M) | Web3 observability platform for decentralized applications including monitoring, alerting and log management based on smart contracts' events, transactions, traces, and states across blockchain: https://www.sentio.xyz/

Curio Research - Seed ($2.9M) | On-chain real-time strategy (RTS) game that stores all game logic and state changes on-chain and allows players to enrich the core game logic via smart contracts: https://www.curio.gg/

Polyhedra Network - Strategic ($10M) | Interoperability, privacy, and scalability platform that uses zero-knowledge (ZK) proof technology to develop applications including, a ZK bridge (zkBridge), a ZK decentralized identity solution (zkDID) and a scalability solution using a large-scale distributed proof generation network (ParaPlonk): https://polyhedra.network/

3RM - Seed ($3.5M) | Web3 relationship management platform offering customer relationship management (CRM), communication management, prospecting, and customer analytics: https://www.3rm.co/

Kaito - Seed ($5.3M) | AI-powered search engine for crypto and Web3 that takes multiple sources of unstructured information and turns it into actionable insights for investors, researchers, developers, and the general public: https://www.kaito.ai/

Azra Games - Seed+ ($10M) | Web3 gaming company aimed at building mainstream collectible and combat role playing games (RPG): https://www.azragames.com/

Strider - Seed+ ($5.5M) | Platform that allows communities to create stories, worlds, and games together by harnessing the power of collective creativity: https://strider.xyz/

Superchain - Seed ($4M) | Developer of the Open Index protocol, which quickly collects and customizes blockchain data using decentralized architecture: https://www.superchain.network/

GeekPay - Seed (Not Disclosed) | Digital currencies payment tracking and risk management platform: https://www.geekpay.co/

Broadway Exchange - Seed ($2M) | Marketplace for digital collectibles for theatre fans; Subsidiary of MuseWorks Labs: https://bwayx.com/

Awaken - Seed ($0.5M) |Story-driven NFT Project: https://www.awakenkakusei.net/

Unbanked - Strategic (Not Disclosed) | Consumer and business banking fintech solution that also integrates cryptocurrencies: https://unbanked.com/

Polybase - Seed ($2M) | A privacy preserving decentralized database using zero-knowledge (ZK) proof technology built using zk-STARKs: https://polybase.xyz/

Den - Seed ($2.8M) | Self-custodial, multi-signature wallet for on-chain organizations including both DAOs and traditional organizations: https://www.onchainden.com/

Blocto - Series A (Not Disclosed) | Secure cross-chain crypto wallet that offers a simple to use user experience: https://blocto.io/

Kekkai - Seed ($0.4M) | Web3 wallet security solution offering fraud and anti-theft tools via a browser extension: https://kekkai.io/

Unikbase - Seed ($2.1M) | Developer of platform to create digital twins of real-life valuables using non-fungible tokens (NFTs) that allow owners to track, protect, and trade with trust: https://unikbase.com/

Ammalgam - Seed ($0.8M) | DeFi platform that combines lending and trading into one protocol unlocking unlimited strategies for market makers: https://ammalgam.xyz/

Kratos Studios - Seed ($20M) | IP owner of IndiGG, one of the world’s largest gaming DAO’s, and an active investor in Web3 gaming and gaming infrastructure: https://www.kratosstudios.io/

Worldwide Webb - Series A ($10M) | Interoperable massively multiplayer online roleplaying game (MMORPG) where players can bring their own NFTs from multiple blockchains: https://webb.game/ 

Huma Finance - Seed ($8.3M) | On-chain factoring market, which enables individuals or businesses to borrow against their future income: https://huma.finance/

Towns - Series A ($25.5M) | Web3 communication platform for online communities that offers tools to create programmable, self-governed gathering spaces to communicate: https://www.towns.com/

OneKey - Series A+ (Not Disclosed) | Open-source crypto wallet offering both hardware and online based wallets: https://onekey.so/

Beldex - Strategic ($25M) | Web3 ecosystem building decentralized privacy-preserving applications including, a private messaging app, a decentralized VPN service, an ad-free Web3 browser, and a cross-chain asset anonymizer: https://www.beldex.io/

Chain Reaction - Series C ($70M) | Designer of semiconductors and related architecture to use in blockchain and privacy hardware running cryptographic compute processes: https://www.chain-reaction.io/

Affine Protocol - Seed ($5.1M) | Cross-chain protocol and app that allows users to invest in multiple yield generating DeFi protocols, all at once: https://affinedefi.com/

HDLabs - Strategic ($0.1M) | Blockchain technology company specializing in Web3 game development and sourcing: http://hdlabs.kr/html/eng/index.jsp

iBLOXX - Strategic ($5M) | Quantitative investment firm that invests, incubates and market makes for leading Web3 companies: https://www.ibloxx.com/

Tsunami Finance - Seed ($1.3M) | A futures and spot trading platform that is building on Aptos: https://tsunami.finance/

Brale - Seed ($11.1M) | Empowers organization to deploy off chain assets on-chain and across multiple-chains: https://brale.xyz/

Sabre56 - Seed ($35M) | Management consultant that advises digital asset miners on the development and operations of mining facilities and data centers: https://www.sabre56.com/

eTEU - Seed (Not Disclosed) | Shipping document digitalization platform that leverages blockchain technology: https://eteu.co.uk/

Factor - Public Sale ($7.6M) | DeFi middleware platform that enables users to create customized asset management strategies built on Arbitrum: https://factor.fi/

Bit.Store - Strategic (Not Disclosed) | Social digital asset investment platform that also provides access to education, news, and other tools for new investors: https://bit.store/

Lifeform - Series A ($5M) | 3D virtual human avatars editor and visual decentralized identity solution based on NFTs: https://www.lifeform.cc/

NeoSwap AI - Seed ($2M) | A multi-party, multi-item NFT swap platform powered by artificial intelligence: https://neoswap.ai/

DE Star - Seed ($0.7M) | Web3 Asian-futuristic phygital co-creation fashion label: http://destar.space/

New Funds

Yield Guild Games - YGG Ventures Fund 1

Cypher Capital - Cypher Capital - Fund 1

Cool Resources

ChainGPT, an AI model optimized for crypto and blockchain technology. Think ChatGPT but applied for web3 specific use-cases such as writing smart contracts, crypto market analysis, curated news, and much more.

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.