​VC funding into Web3 startups down 82% year-over-year: Crunch | Crypto LVL

​VC funding into Web3 startups down 82% year-over-year: Crunchbase.

Crunchbase noted that while it has been a bearish start for Web3 startup funding in 2023, “venture funding is down in almost every sector.”

According to data from Crunchbase, venture capital funding into Web3 startups tanked 82% year-over-year (YoY), declining from $9.1 billion in Q1 2022 to $1.7 billion in Q1 2023.

Crunchbase News highlighted the data in an April 20 report , noting that the $1.7 billion figure for Q1 2023 also marks the lowest amount of Web3 startup funding since the $1.1 billion posted in Q4 2020 — a time in which “many people had never heard of Web3.”

In this context, Web3 startups are defined as early-stage companies working directly with crypto and/or blockchain tech.

Deal flow, or the number of total deals between VCs and Web3 startups, also saw a significant drop, with 333 deals recorded in Q1 2023 — marking a YoY decline of roughly 33%.

Additionally, the report highlights that the number of big Web3 startup funding rounds hitting nine figures almost completely dried up over the past year.

“In Q1 2022 , VC-backed startups raised 29 rounds of more than $100 million. That included massive raises of $400 million or more by ConsenSys and Polygon Technology, as well as — of course — FTX and its U.S. affiliate FTX US,” the report reads, adding:

“The most recently completed quarter saw only two rounds hit the nine-figure mark, as VCs have hit the brakes on spending big in the space.”

While the business information platform acknowledges that interest in Web3 startups has cooled of late, it also emphasizes that “venture funding is down in almost every sector.”

Crunchbase attributes much of the decline in Web3 funding to investors opting for a risk-off approach over the past few months by seeking out opportunities in “industries they know best — such as cybersecurity or SaaS, not the promise of the next iteration of the internet Web3.”