Undeterred by the ongoing slump in the global crypto market and the contagion following the collapse of FTX, Venture Capitalists continue to invest in crypto.
According to the Pitchbook report, crypto VC investment in 2022 outweighed that of fintech and biotech. It pulled in $6.5 billion over the last 12 months, with $879 million in the last quarter. The past week recorded a $4.75 million round for Earn Alliance, $70 million for Ramp Network, $15 million for Roboto Games, $3.1 million for NFT game Burn Ghost, and $72 million for Keyrock. There were talks for a $2 billion metaverse fund by Animoca Brands, while Jihan Wu – Bitcoin mining kingpin – is keen to raise $100 million at a valuation of $1.5 billion.
So why do investors inject in risk assets and end up losing billions? This remains the biggest question of all. Some VCs say they are being far more cautious than before. And a spokesperson for Coinbase said funding has tightened. Yat Siu, Animoca Brands CEO, said some deals may not make as much sense as they did a few months ago because of the market circumstances or changes in valuations. Paulina Joskow, Ramp Network business lead, pointed out that a number of projects failed to meet raising requirements and a number of deals falling through at the last minute. She said many projects don’t look forward to anything bigger than a Series B.
Kevin de Patoul, CEO of Keyrock, believes there is a fresh emphasis on due diligence utterly unremarkable in most other industries. This is a groundbreaking shift in crypto. Siu of Animoca Brands said the company learned a lot from enduring the much colder and more forbidding environments of the 2017-2019 bear market.
