Blockchain Investors Begin Looking to Web3
Blockchain breaks down into five main sectors:
- Centralized finance (CeFi)
- Decentralized finance (DeFi)
- Infrastructure
- Web3
- Non Fungible Tokens (NFT)
In the first half of 2022, total funding for all of the above sectors was around $30 billion, almost as much as the entire year of 2021.
But the crypto winter and the collapse of many crypto-oriented businesses made VCs less keen to invest.
As a result, the total amount raised in the second half of 2022 was only around $7 billion, and dropped as each month passed.
In the fourth quarter of 2022, the number of transactions fell to 182, and only five exceeded $100 million in value.
Within this group, investments in the Web3 sector, which includes Metaverse and GameFi, proved to be the most popular. Throughout 2022, the Web3 sector accounted for 616 deals, while CeFi accounted for only 201.
Interestingly, the value of funding was the same at $9.2 billion for both, indicating that the threshold investment cost for Web3 projects is, on average, significantly lower. In fact, the average transaction for Web3 was around $15 million, whereas for CeFi, it was around 46 million.
Overall, funding for Web3 startups fell by almost $7 billion in Q4 2022, from $9.3 billion to $2.4 billion.
DeFi attracted $3.1 billion across 299 deals and NFTs $3 billion in 243 sales.
The infrastructure sector was also popular. Of the 295 financing deals completed, companies managed to raise almost $12 billion in capital, an average of $40.1 million per deal.
In contrast, the least popular were investments in NFTs and CeFi.
