Bitcoin startups continued to attract high investor interest in 2023 amidst an overall decline in venture capital investment in the crypto industry.
VC funding for crypto projects fell by 64.5% in 2023, according to Trammell Venture Partners. Amid the decline, venture capital investment in startups related to the Bitcoin ecosystem totaled $301 million, down just 12.5%. This compares to $343 million in 2022 and $301 million in 2021.
Meanwhile, the total number of investment deals involving Bitcoin startups increased by 69.2% in 2023, while the crypto industry generally went down by 35.3%. The number of BTC-related companies that received funding increased by 56.9%. The number of early-stage investment deals in this area reached 5.36% of all crypto-related deals.
The most active VC funds investing in Bitcoin startups included:
- General Catalyst;
- Valor Equity Partners;
- Y Combinator;
- Goodwater Capital;
- M13;
- London Venture Partners;
- Gradient Ventures;
- Accomplice;
- Draper Associates;
- Bain Capital Ventures.
TVP analysts note that investors were most interested in the pre-seed financing round — the total number of investments at this stage grew by 360%. The surge of venture investments at the pre-seed stage signals the upcoming activity at the seed, series A, and subsequent stages.
Cryptovstartups raised $1.9 billion in venture funding in Q4 2023, according to PitchBook. And in Q1 2024, investments in the Web3 industry reached nearly $2.5 billion.
