For the first time since March 2022, venture capital investments in crypto startups increased, reaching $1.9 billion in the fourth quarter of 2023. The figure represents a 2.5% rise from the third quarter, according to a recent PitchBook report.
The growth is consistent with an apparent resurgence of investor interest in crypto startups in early 2024, spurred by the approval of spot Bitcoin (BTC) exchange-traded funds (ETFs).
In February, a diverse group of crypto startups announced recent funding raises, including Lava Protocol, Analog, Helika, Truflation and Omega, among others.
The past two weeks have also seen venture capital firm Andreessen Horowitz (a16z) announcing a $100 million investment in Ethereum’s restaking protocol EigenLayer. The ecosystem also received funds from Binance Labs through its liquid restaking service Renzo recently.
Another $27 million was poured into the consensus layer Avail in a seed funding round led by Founders Fund and Dragonfly, while venture capital firm Hack VC raised $150 million to invest in early-stage crypto and artificial intelligence (AI) startups.
Cointelegraph’s VC Roundup highlights some of the startups that secured funding in February.
Ethereum layer-2 scaling solution Taiko has closed a $15 million Series A funding round ahead of its mainnet launch. The round was led by Lightspeed Faction, Hashed, Generative Ventures and Token Bay Capital, with participation from previous investors Wintermute Ventures, Amber Group and OKX Ventures, among others. The startup, founded in 2022, has so far raised a total of $37 million across three rounds, promising to build a decentralized layer-2 architecture to support all Ethereum Virtual Machine (EVM) opcodes. Taiko claims to have executed six testnets involving over one million unique wallets as well as 13 million transactions.
Decentralized finance (DeFi) protocol Singularity has disclosed a $2.2 million funding round led by Gumi Cryptos Capital. The startup targets institutional investors seeking compliant access to DeFi applications and on-chain transaction confidentiality. Additional investors in the round include Nomura’s subsidiary Laser Digital, Eureka Partners and previous investors such as Apollo Crypto, Digital Asset Capital Management and Gandel Invest. Singularity leverages Noir-based zero-knowledge circuits, a domain-specific language for Zero-Knowledge Succinct Non-Interactive Argument of Knowledge-proving systems developed by Aztec. The technology allows confidentiality in on-chain transactions. The latest round brings Singularity’s total funding to nearly $4 million since its inception in 2022.
AltLayer, a protocol for launching native and restaked rollups using optimistic and zero-knowledge stacks, has successfully raised $14.4 million in a strategic funding round co-led by Polychain Capital and Hack VC. The platform offers rollup-as-a-service (RaaS), enabling developers to launch rollups. The team also claims to be recreating a restaked rollups framework outside Ethereum, building a decentralized verification layer that leverages Bitcoin staking in partnership with Babylon. The solution, according to the startup, will enable users to stake BTC on Bitcoin while still securing external networks. “With the creation of hundreds of thousands of rollups, we must create business models where rollups can sustain themselves while delivering clear value to the bottom line of builders and end-users,” explained AltLayer’s founder Yaoqi Jia about the startup’s work to scale decentralized applications deployment on the Ethereum network, adding that “restaked rollups are now at the core of this vision.” Additional investors in the round include HashKey Capital, OKX Ventures, Bankless Ventures, Primitive Ventures and SevenX, among others.
Congratulations @alt_layer!
They’ve successfully closed a strategic funding round of $14.4 million, with HashKey Capital proudly participating in this milestone.#HashKeyportfolionews https://t.co/mUqyW8gmUN— HashKey Capital (@HashKey_Capital) February 22, 2024
PredX, an artificial intelligence (AI)-enabled prediction market, has successfully raised $500,000 in pre-seed funding, reaching a $20 million valuation, according to a statement. The round was led by Penrose Tech, with support from Malana Ventures. Incubated by the SEI chain, PredX allows users to trade predictions on current trends and events, such as elections, and purchase shares based on the probability of an event or outcome. The startup uses blockchain to record all transactions for transparency and integrates AI to customize event suggestions and analyze vast amounts of data on cryptocurrencies, technology, and celebrities. PredX has also applied for patents for two AI algorithms and is preparing to launch its testnet soon, with plans to support the EVM ecosystem.
Digital assets trading platform Ouinex has raised over $4 million from its seed and first private funding rounds. The funding was entirely raised within the Ouinex community of traders from traditional finance, said the company. The startup was founded by former TradFi executives in 2022. The funds will be used to enhance the platform’s features and obtain additional regulatory licenses. “Our commitment to a user-driven approach not only aligns with the principles of decentralization but also ensures that our community members are not just investors and users but active participants in shaping the future of Ouinex,” said Ilies Larbi, CEO of Ouinex.