Excitement Builds Around Web3 And Crypto, But VC Dollars Don’t Follow #CriptoNews

Editor’s note: For more Web3 coverage, visit Crunchbase’s Web3 Tracker, where we track startups, investors and funding news in the Web3, cryptocurrency and blockchain space, powered by Crunchbase’s live, comprehensive data.

The world of crypto and blockchain have rejoiced with the U.S. presidential administration change offering the promise of reduced regulations around digital assets.

However, funding to Web3 startups did not see a dramatic push in Q4, as VCs invested the least amount of money in the sector in a year, per Crunchbase data.

Last year’s fourth quarter saw only $1.8 billion flow to Web3 startups in 267 announced deals, an 18% dropoff in dollars from Q3 when similar startups raised $2.2 billion in 326 deals.

However, the Q4 dollar number is a 20% increase from the same quarter in 2023, which saw only $1.5 billion invested in Web3 startups in 348 deals.

The quarter ended a year where the sector saw the total dollar investment amount remain pretty unchanged from 2023 and deal flow significantly slow.

For the year, $8.5 billion was invested into the Web3 sector in 1,545 deals, a similar dollar amount from the $8.2 billion in 2023, but a 26% decline from the 2,085 deals that same year.

Big rounds slow

The quarter’s subdued numbers are not surprising when looking at the rounds raised. Only four rounds were raised of $50 million or more — compared to nine in Q3.

The biggest Web3-related rounds in Q4 were:

• In October, Montreal-based Blockstream, a blockchain developer of digital asset infrastructure, raised $210 million in convertible note funding.
• New York-based Investment platform Public raised a $135 million Series D-2 — including $105 million in equity and $30 million in debt — in December. Public is a fractional investing platform that allows members to build diverse portfolios, including stocks, ETFs, crypto and NFTs.
• In November, U.K.-based CrytocoinMiner, a cryptocurrency cloud-mining platform, raised a $100 million venture round.

Interestingly, two of those rounds (Blockstream and Public) were among the five largest raised in the sector in 2024. The two largest rounds of the year were:

• In July, Infinite Reality, a Connecticut-based Web3 startup that creates 3D immersive environments, raised a $350 million round at a $5.1 billion valuation from an undisclosed multifamily office. (This month, the startup raised a $3 billion financing at a $12.25 billion valuation from an undisclosed investor after it canceled its plan to go public through the special-purpose acquisition company Newbury Street Acquisition in December.)
• In April, The numbers were greatly helped out by New York-based Monad Labs locking up the biggest Web3 round of the year thus far, collecting $225 million in a funding led by Paradigm

What it means

Web3 funding has been uneven since late 2022. The collapse of FTX and the overall venture slowdown hit the crypto aspects of Web3 hard.

It seems logical that same segment is about to see a significant upswing. Crypto enthusiasts rejoiced in November as former President Donald Trump reclaimed the White House — promising to bring much more crypto-friendly policies to the federal government.

Just last week, Trump signed an executive order concerning digital assets that, among many things, looks into the possibility of building a national digital asset stockpile and creates an interagency working group to look at crafting regulatory framework for digital assets.

Crypto markets popped after the election and Bitcoin is still worth more than $100,000. In late November, SEC Chairman Gary Gensler, who has taken a strict regulation-by-enforcement approach to crypto, said he would resign.

However, while crypto fans celebrate what they think is a digital asset revolution, venture capitalists seemingly have moved much more slowly, as borne out by the numbers. Although it is important to remember that the election did occur in November, and with the approaching holiday season it may have been hard to consummate many big deals.

In addition, crypto and digital assets are only one category of the overall Web3 ecosystem. Startups developing applications, protocols and different layer technologies also make up Web3 and its funding — so even if VCs go hard on crypto funding in the next few quarters, the Web3 numbers may not be as high as one might think.

Regardless, it should be an interesting 2025 for Web3 due to what seems like crypto euphoria. Whether that euphoria means higher venture numbers only time will tell.

Methodology

For Web3 funding numbers, we analyze investments made into VC-backed startups in the cryptocurrency and blockchain industry group.

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