The financing of web3 companies decreases by 76 % compared to the previous year, while AI startups continue to record exponential growth

The financing of web3 companies decreases by 76 % compared to the previous year, while AI startups continue to record exponential growth

Financing of Web3 companies drops by 76 % compared to the previous year

According to data from Crunchbase, the financing of web3 companies has dropped by 76 % in the second quarter of this year compared to the same quarter in 2022. While web3 companies collected over $ 7.5 billion in the second quarter of 2022, it was only a little more than $ 1.8 billion this year.

Even in the first half of 2023, a remarkable decline in the financing of web3 startups emerged. With a total of 3.3 billion US dollars collected, this was a decrease of 78 % compared to the previous year, in which web3 companies were able to collect impressive $ 16 billion.

In the second quarter of this year, only $ 720 million of ten new crypto risk capital funds (VC) were collected. Crunchbase used cryptocurrency and blockchain-based startups to analyze the web3 industry and determine these numbers.

The data from Crunchbase also confirm that web3 startups have not found a significant relief from the crypto winter that the industry searched for last year. The crypto winter followed the collapse of several large companies.

In terms of the geographical distribution of investments, startups based in the USA were leading. In the second quarter of 2023, 45 percent of all crypto-VC financing accounted for US companies. The United Kingdom followed with 7.7 percent, followed by Singapore with 5.7 percent and South Korea with 5.4 percent. In the United States, also in the United States, companies with 43 percent were leading, followed by Singapore and Great Britain with 7.5 percent and South Korea with 3.1 percent.

In terms of the sectors in the web3 industry, which attracted most of the risk capital, Crunchbase data showed that startups based on crypto, trade, exchange, invest and lend the highest amount-collected a total of $ 473 million, which constitutes $ 20 percent of the capital employed. Web3, NFTS, Gaming, Daos and Metaverse startups together collected $ 442 million, which makes up 19 % of the risk capital invested in the second quarter. An outstanding crypto protocol was Layerzero, which was collected with the support of Andreessen Horowitz (A16Z), Christie’s and other $ 120 million

While web3 startups had difficulty arousing the interest of the risk capital providers, startups with artificial intelligence (AI) continue to be exponented. In the first half of 2023, AI-based startups secured a total of $ 25 billion in financing. Examples include the Worldcoin crypto project, which was led by Openai CEO Sam Altman and collected $ 115 million in a series C round, as well as Runway, a developer of AI-based tools for video creation, which collected $ 141 million in the Ferie C. Another success story is the AI-based creative studio startup captions based in the USA, which collected $ 25 million in a series-B round listed by small Perkins.

It remains to be seen how the financing situation for web3 companies will develop in the future and whether they will experience a recovery from the current challenges. At the same time, interest and financing for startups with artificial intelligence will remain strong.