Web3.0 Start-ups leading fundraising sector in early stage investment & fundraising
Last week, Pitchbook published their latest Emerging Tech Indicator (ETI) report which tracks early stage investment activity amongst the world’s most successful venture capital firms to “gauge which areas of tech are grabbing VCs’ attention”.
In Q3, the sector that received the largest amount of VC investment according to the ETI report was within the Web3 space receiving almost $900 million. Given the difficult year that NFTs, Blockchain & Cryptocurrencies have had with the collapse of Luna, FTX & the total depreciation in NFT valuations it begs the question of:
What is the value? Why is so much investment in this space?
Web3.0 investment contained more than investments into fintech, biotech, security, ecommerce, prop-tech, climate-tech, gaming, and dozens of other mainstream industries.
Q3 wasn’t the first time that Web3 topped the ETI report. In fact, Web3 has led the ETI rankings for 5 consecutive quarters now. Over the past 12 months, there has been over $6.5 billion of ETI capital invested into Web3, which is more than double that of the next highest category of fintech at $2.7 billion.
On comparison to the number of unicorns & exits that have grown within this space, the numbers highlight a significant risk given low numbers of firms reaching maturity. Several high profile cases of liquidity crashes, dodgy accountancy & strange events could prompt a realignment of investment into these firms, this is especially as the total market combined cap across Cryptocurrencies has declined by 66% over the year.
More than anything 2022 will be known as the year of Crypto as they dominated the entire year.
By every metric they exploded in interest, what the year 2023 will have in store for the Web3.0 world will likely be incredible & a difficult Pre-seed/Seed environment. This could help to create really use cases for Web3.0 Applications that drive forward problem solving start-ups in the same way that the financial crash of 2008 drove a reset in the VC/Tech Space.
The Key takeaways shows that founders, operators & investors want to facilitate the opening up of data & a better way of playing a role in the connectivity that drives the modern world. Next year will be an exciting one in the Web3.0 World.
Impact Fundry we will be dedicated to supporting this unified vision for Web3.0 investment.
