Venture capitalists just keep plowing billions into crypto startups

It’s been a rough spell for crypto of late.

Nearly six months after Bitcoin, Ether, and just about every other major cryptocurrency hit all-time highs, digital assets seem to have found a new normal in the markets—and it’s far lower than their November heights. 

Bitcoin is still nearly 40% lower than its all-time high, with its market capitalization having cratered from $1.22 trillion to $786.3 billion, CoinMarketCap data show. Ether hasn’t been much better, either. It’s down 37% from its peak. Global sales of NFTs, meanwhile, have returned to summer 2021 levels, according to CryptoSlam. And crypto stocks have been hammered as of late, with public-market investors still trying to figure out how the hell to handle inflation and the war in Ukraine.

Venture capitalists don’t seem to mind, though. 

Data from PitchBook provided to Fortune show that venture capitalists have still poured $11.65 billion into crypto and blockchain startups around the world in 2022, as of April 12—meaning that investors are currently on pace to inject a record amount of capital into the crypto and blockchain space this year.

Followers of the crypto markets shouldn’t be too surprised. Between the $400 million Series C in January conducted by crypto exchange darling FTX and the $400 million funding round by USD Coin-issuer Circle Internet Financial in April, the stream of deals has been ripping right along in 2022. (Just ask any reporter you know about their inbox.)

There was the $450 million raise in March by Bored Ape Yacht Club creator Yuga Labs, which is now valued at $4 billion thanks to the backing of the likes of Andreessen Hororwitz, FTX Ventures, and others. Blockchain.com has raised new funding at a $14 billion valuation, ahead of a potential listing in the public markets. Even future Hall of Famer Tom Brady tapped in,, with his NFT platform, Autograph raising $170 million in January.

Of course, crypto startups are the outliers here. With fears over a recession growing on Wall Street, inflation soaring, and the Fed set to take an even more aggressive stance on raising rates in the months to come, global funding on the whole dropped 19% in the first quarter from the prior three months, as Jessica reported earlier this month. 

Despite those looming clouds, venture capitalists and crypto companies—from Katie Haun to Sequoia to FTX to Crypto.com—have been raising and deploying mammoth amounts of money dedicated to crypto and blockchain, whether it be in the form of traditional investments or token sales. And then there’s the matter of the crypto-curious investors who have been increasingly dabbling in the space as well. BlackRock and Fidelity, for instance, both participated In Circle’s $400 million funding round announced in mid-April. 

The idea is that crypto is still in its nascency. But believers think it’s the future, and venture capitalists want to play a part in helping build the next great market. Whether that’s the case remains to be seen, but expect more fundraising to come—there are certainly plenty of companies and projects out there to invest in. It’s worth noting, though, that this is still the wild world of Web3, where hacks, overzealous regulators, and hucksters have the potential to change the course of the conversation with relative ease. But I suppose that’s all part of the job, no? After all, as Haun, the former Andreessen Horowitz general partner who left in December to start her own fund Haun Ventures, told my colleague Michal Lev-Ram in our February-March cover story: “The nature of running a crypto fund is taking on risk.”

Declan Harty
Twitter: @declanharty
Email: [email protected]
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Jackson Fordyce curated the deals section of today’s newsletter.

VENTURE DEALS

- Tessera Therapeutics, a Somerville, Mass.-based genetic medicine-focused biotech, raised over $300 million in Series C funding from investors including Abu Dhabi Investment Authority, Alaska Permanent Fund Corporation, Altitude Life Science Ventures, ARTIS Ventures, Cormorant Asset Management, Flagship Pioneering, Hanwha Impact Partners, Longevity Vision Fund, March Capital, SALT Fund, SoftBank Vision Fund 2, and others.

- Foodics, a Riyadh, Saudi Arabia-based food and beverage technology startup, raised $170 million in funding from investors including Sequoia Capital India and Prosus NV.

- ThreatLocker, a Maitland, Fla.-based cybersecurity firm, raised $100 million in Series C funding led by General Atlantic and was joined by investors including Elephant VC and Arthur Ventures.

- Flipside Crypto, an on-demand analytics and learning platform for blockchains, raised $50 Milion Series in A funding led by Republic Capital and was joined by investors including True Ventures, Galaxy Digital, Terra, Dapper Labs, M13, Blockchain Coinvestors, Collab Currency, Hashkey, Avon Ventures, Lightshed, Resolute, Boston Seed, Converge, Hutt Capital, Gaingels, Commerce Ventures, Quiet, and Tribe Capital.

- Kinara Capital, a Bangalore, India-based fintech platform providing loans to entrepreneurs in India, raised $50 million in Series E funding led by Nuveen and was joined by investors including Triple Jump. 

- Levels, a New York-based software company that gives feedback on how food affects your health, raised $38 million in Series A funding from angels including Basecamp Fund’s Andrea Funsten, Acquired Podcast’s Ben Gilbert and David Rosenthal, Lenny Rachitsky and the Airbnb Alumni Syndicate, The Generalist’s Mario Gabriele, CrossFit athlete Mat Fraser, Shrug’s Moshe Lifschitz and Niv Dror, a16z, and the Levels member community through a crowdfunding round. 

- Gravity Sketch, a London-based 3D design tool, raised $33 million in Series A funding led by Accel and was joined by investors including GV, Kindred Capital, Point Nine, and Forward Partners. 

- Carlsmed, a Carlsbad, Calif.-based spinal surgery tech company, raised $30 million in Series B funding led by B Capital Group and was joined by investors including U.S. Venture Partners, The Vertical Group, Cove Fund, and Wavemaker Three-Sixty Health.

- Playable Worlds, a San Marcos, Calif.-based online game developer, raised $25 million in Series B funding led by Kakao Games Corp. and was joined by investors including BITKRAFT Ventures, Galaxy Interactive, Lilith Games, and Gaingels. 

- Salad, a Web3 compute-sharing network, raised $17 million in Series A funding led by Left Lane Capital and Origin Ventures and was joined by investors including Kickstart Seed Fund, Royal Street Ventures, and Carthona Capital.

- Nue Life Health, a Miami-based mental wellness company, raised $15 million in Series A funding led by Obvious Ventures.

- Vitruvian, a Perth, Australia-based in-home strength and personal training platform, raised $15 million in Series A funding from investors including Larsen Ventures and Ten13. 

- Delta One, a San Francisco-based yield generation protocol on the Solana blockchain, raised $9.1 million in seed funding led by Alameda Research and Ship Capital and was joined by investors including Solana Ventures, Electric Capital, AlleyCorp, Chris McCann, and Alfred Chuang.

- Beamy, a Paris-based SaaS management platform, raised more than $9 million in Series A funding led by Aglaé Ventures, ISAI, and Evolem funds and was joined by angels. 

- EvoEndo, a Denver-based transnasal endoscopy medical device company, raised $8.4 million in Series A funding led by TLP Investment Partners and was joined by investors including Sunshine Charitable Foundation and the Jill and Paul Meister family.

- BioFlyte, an Albuquerque, N.M.-based biodetection company, raised $6.1 million in funding led by Cottonwood Technology Fund and was joined by Anzu Partners. 

- Nuclia, a Barcelona-based A.I.-powered search engine, raised $5.4 million in seed funding led by Crane Venture Partners and Ealai. 

- Glacier, a San Francisco-based robotic waste technology provider, raised $4.5 million in seed funding led by New Enterprise Associates and was joined by angels including former GE CEO Jeff Immelt, climate investor and former climate policymaker Sierra Peterson, and former Uber CPO Manik Gupta.

- alphaMountain.ai, a Draper, Utah-based domain and IP intelligence company for cybersecurity investigational and protection platforms, raised $2.7 million in seed funding led by Mercato Partners’ Prelude Fund. 

- Superjoi, a Los Angeles-based platform connecting creators to their fans through voting and fundraising, raised its $2.5 million in pre-seed funding from investors including Ascension, QED Investors, Systema VC, Tomahawk, and Modern Venture Partners.

PRIVATE EQUITY

- American Track, backed by DFW Capital, acquired The Railroad Associates Corp., a Boiling Springs, Pa.-based rail services business. Financial terms were not disclosed. 

- Apollo acquired Tony’s Fresh Market, a Chicago-based grocery retailer. Financial terms were not disclosed.

- Arcline Investment Management acquired Meritec, a Painesville, Ohio-based designer and manufacturer of interconnect embedded systems and connectors, including its wholly owned subsidiary Joy Signal Technology, based in Chico, Calif. Financial terms were not disclosed. 

- Orion Advisor Solutions, backed by Genstar Capital and TA Associates, agreed to acquire Redtail Technology, a Sacramento, Calif.-based CRM software firm for the wealth management industry. Financial terms were not disclosed. 

- SoftBank’s robotics arm agreed to acquire a minority stake in Avalon SteriTech, a Hong Kong-based cleaning technology startup. Financial terms were not disclosed.

- The Jordan Company acquired a majority stake in Communications & Power Industries, a Palo Alto, Calif.-based manufacturer of electronic components, subsystems, and antenna systems for communications, government, and medical markets. Financial terms were not disclosed.

EXITS

- Avient acquired Protective Materials, the Heerlen, Netherlands-based chemicals company unit of Royal DSM, from Royal DSM. A deal is valued at $1.44 billion. 

- Arcline Investment Management agreed to acquire Omega Engineering, the Norwalk, Conn.-based process measurement and control instrumentation unit of Spectris, from Spectris for $525 million.

- Corporate Visions, a portfolio company of The Riverside Company, acquired DSG Consulting, a Little Rock, Ark.-based tech consulting firm, from Stone-Goff Partners. Financial terms were not disclosed. 

OTHER

- Blackrock Neurotech acquired MindX, a Bethesda, Md.-based spatial computing software firm. Financial terms were not disclosed.

- Gupshup acquired AskSid, a Bengaluru, India-based conversational A.I. provider to ecommerce and retail companies. Financial terms were not disclosed.

FUNDS + FUNDS OF FUNDS

- Chipotle raised $50 million for a fund focused on supporting seed to Series B stage companies in the food industry. 

PEOPLE

- Avance Investment Management, a Miami and New York-based private equity firm, hired John Civantos as senior partner. Formerly, he was with MSD Partners. 

- Clearco, a Toronto, Canada-based growth capital firm, hired Mike Gelb to lead Clearco’s venture partnerships team.