Venture Capital Funding in the Web3 Field Declined by 76%, According to Crunchbase Data

Compared to $7.5 billion raised over the same period last year, Web3 companies raised slightly more than $1.8 billion in the second quarter of 2023.

Venture Capital Funding in the Web3 Field Declined by 76%, According to Crunchbase Data

Web3 funding from venture capital (VC) funds fell 76% in the second quarter compared to the same period a year earlier, according to a depressing new report from Crunchbase. If you contrast the first half of 2023 with the equivalent period in 2022, the numbers do not improve. This year, Web3 startups have raised just $3.6 billion, a 78% decrease from the roughly $16 billion they raised in the first half of 2022.

Crunchbase Thinks Web3 Has Been Badly Hit by Crypto Winter

Crunchbase characterized Web3 as firms focused on cryptocurrencies and blockchain technology that have been severely impacted by the recent crypto winter. While overall VC financing has decreased, with Crunchbase reporting an 18% dip in all industries in the second quarter of 2023, funding for the cryptocurrency industry has fallen by a considerably greater percentage. In the meantime, firms focused on artificial intelligence have emerged as investors’ new favorite objects, receiving $25 billion in funding in the first half of 2023.

Firms Hopeful for the Future of Web3

Many well-known companies continue to be optimistic about Web3’s future even as financing levels off. In its second annual “State of Crypto” report, a16z highlighted the sector’s health and singled out Web3 gaming, in particular, as exhibiting growth.

Along with ARK Invest and Animoca Brands, the company supported Mythical Games in a $37 million funding round in June. Prior to the fundraising announcement, Mythical Games had recently revealed that the NFL Rivals app had reached 1 million downloads.