Venture funding was flat this week, increasing slightly from $229MM to $276MM. The Metaverse/Gaming and Infrastructure segments which were down last week recovered and received the most funding out of any sector, at $87MM and $67MM, respectively. Interestingly, CeFi, one of the most highly funded sectors in the first half of 2022, has seen the lowest funding of any category this past month and received no funding this week. This decline could be due to the major CeFi insolvencies we’ve seen this year, including Celsius, giving venture investors pause. The biggest deal of the week was a unique one: IslamicCoin, which secured $200MM in funding. IslamicCoin is the native currency of Haqq, a community-run network dedicated to empowering an ethically-defined financial ecosystem. 10% of each token issuance is automatically dedicated for philanthropic purposes.
There were two notable crypto fund raises this week. Portal Ventures raised a $35MM fund for early-stage crypto ventures, and LongHash Ventures raised $100MM to invest in Web 3 infrastructure.
The majority of deals are being done in the early stages, with 37% of deals being seed rounds.
Deal of The Week:
CreatorDAO, a decentralized autonomous organization (DAO) focused on the creator economy, has raised $20 million in a seed investment round led by Andreesen Horowitz (a16z) and Initialized Capital. Creator DAO is looking to share capital, consulting, and technology resources with influencers in return for a share of their future earnings. Other investors include celebrities Paris Hilton, The Chainsmokers, and Kygo’s Palm Tree Crew.
Why is this Deal of The Week?
The “creator economy” is the term for monetizing digital content. In today’s increasingly digital world, it is effortless for someone to create and upload content to have it consumed by others. Content creation on platforms like Youtube, Instagram, and TikTok has given rise to “influencers.” Influencers are accounts that have amassed large social media followings and now present companies with extensive marketing opportunities.
The creator economy is estimated to be worth over $100 billion globally, with over 50 million people as self-reported creators. Some of the most prominent celebrities in the world, such as Cristiano Ronaldo or Kylie Jenner, can command nearly $1 million for a single Instagram endorsement. The creator economy is expected to continue growing as human lives become more entwined in the digital age. CreatorDAO is offering the average person an opportunity to capitalize on the creator economy. Members of the DAO will have a say in which creators to invest in. On the other side of the business, creators will receive access to capital and advice from some of the biggest creator names in the industry. CreatorDAO is one of the first DAOs targeting the creator economy and will be interesting to watch going forward.
Selected Deals
Vespene Energy is an infrastructure-based renewable energy platform. The company is aiming to become the first to offer a service that successfully converts methane gas produced from landfills into mining power for Bitcoin ($BTC). Vespene Energy plans to accomplish this by installing micro-turbines on landfills that convert unused methane gas into electricity. The company has secured $4.3M in funding led by Polychain Capital with additional participation from environmentally-focused funds. Vespene Energy plans to use the capital raised to launch a test site in California.
Pinata is a media distribution platform that builds content for its users’ NFT projects. In addition, the company also offers support infrastructure for the Metaverse, Web3 applications, and NFT marketplaces. The company has secured $21.5M in funding through its Series A round co-led by Pantera Capital, Greylock Partners, and Offline Ventures. The funding round also included additional investor participation from Opensea, Volt Capital, and Alchemy. Pinata plans to use the capital raised to advance the platform’s technology infrastructure for its users.
RISC Zero is an infrastructure-based blockchain developer aiming to develop trustless, verifiable, and affordable software products that implement zero-knowledge (zk) technology. The company has secured $12M in funding through its seed round led by Bain Capital Crypto. The funding round also included additional investor participation from Geometry, D1 Ventures, Cota Capital, and others. A preview of RISC Zero’s new network is anticipated to release in Q3 2022.
Old Street Digital (OSD) is an institutional crypto asset management firm. The company plans to provide its clients with a selection of actively managed research-driven investment funds operated by experienced and credible professionals. The firm has secured $2.8M in funding through its seed round led by Draper Associates. The funding round also included investment participation from Plassa Capital, various venture capital firms, and angel investors. Old Street Digital plans to launch its first fund in Q3 2022 and a subsequent fund in Q4 2022.
Merkle Science is an infrastructure-based cryptocurrency risk and intelligence platform. The firm aims to capitalize on the growing demand for products that increase protection from hacks, thefts, and exploits. The company has secured $19M through a Series A Extension round, bringing total Series A funding to $24M. The extension round was co-led by BECO Capital, Darrow Holdings (a Susquehanna Group affiliate), and K3 Ventures. The funding round also included additional investor participation from Kraken Ventures, Digital Currency Group (DCG), Republic Crypto, and others. Merkle Science plans to use the capital raised to fast-track global growth and for R&D.
