Messari's State of Crypto Funding Q3, 2023 Report

October 6, 2023

Breaking down the Q3 crypto funding report so you don't have to!

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GM 👋

This is the Smoothie Newsletter.

I’m going to be in New York starting Oct 22!

Anyone there? Or any fun events I should go to?

Thinking of hosting a couple things too 🤔


Messari published the State of Crypto Fundraising - Q3 2023 report. And it’s not looking good for web3 startups.

Here are the highlights of the report:

1. With just 297 deals, the total funding amount was just under $2.1 billion.

Both deal count and funds raised were down 36% from last quarter.

Time to double down or pivot?

2. Seed funding is the big player—$488M over 98 rounds. 🌱💰

Big move from late to early-stage.

From 37% in Q4 2020 to 48% now.

Late-stage funding (Series B or later) is down to a measly 1.4% in Q3 2023. 📉

3. Chain Infra, DeFi, and Gaming are the sectors where the money is flowing.

This pattern is the same as the last 12 months.

Services functions including marketing, incubators, security, and legal services also received $133M funding.

4. Infrastructure funding continues to receive more funding relative to other apps.

But this trend may not continue longer as investors are realizing that without successful consumer-facing apps building on top of the infrastructure, it’s hard to generate their desired returns.

5. Chain infrastructure accounted for 18% of invested capital with only 21 deals.

DeFi had the most number of deals - 67.

6. In the Chain infrastructure category, Scaling solutions and Smart Contracts platforms were the biggest subcategories.

Other subcategories include Interoperability, Mining Operations and support, Oracles, and Validators Operations and support.

7. In DeFi, Exchanges accounted for 38% of funding, nearly $79 million. The average deal size in the DeFi sector was $3 million.

8. Binance Labs, Base, Outlier Ventures, and Polygon were the biggest investors in the DeFi sector.

9. Consumer apps were led by the Gaming sector by large. Metaverse and collectibles 2nd and 3rd subcategories.

10. Binance also led the gaming sector investments with 4 deals.

11. US is still home to the majority of investors, despite project founders slowly leaving the US in favor of other regulatory-friendly countries.

54% of all the active investors were based in the United States, in line with the last four years.

Read the full report here.

Yeah Sam, Right!

Cicada Partners: $9.7M

Non-custodial credit risk management company Cicada Partners raised $9.70M in a Pre-seed funding round led by Choppa Capital, with participation from Bitscale Capital, Bodhi Ventures, Shiliang Tang.

Phaver: $7.0M

Web3 social platform powered by Lens Protocol and CyberConnect Phaver raised $7M in a Seed funding round from Polygon Ventures, Nomad Capital, Symbolic Capital (ex Hyperedge Capital), dao5 (daofive), Foresight Ventures, Alphanonce, Factor Ventures, Superhero Capital, Swissborg Ventures.


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