Key Takeaways
- Venture capital investors took a breather heading into March after investing around $4 billion in the previous three weeks. CeFi projects continue to get a substantial portion of investments, raising $123 million this week. A DeFi project received $70 million in funding, and NFT/Metaverse investments totaled $52 million. Infrastructure was an unusual laggard in the venture space, raising $35 million. Most of this week’s capital flowed into two new venture capital funds to the tune of almost $1.2 billion. Of note, one of the funds is being run by the South Korean government.
- Active investors this week include Jump Crypto, Coinbase Ventures, and Pantera Capital.
- Deal of the Week: Dialect raised a $4.1 million seed round to help bring personalized and actionable push notification infrastructure to Web3 applications that could continue retail crypto adoption.
Venture Capital Deals
VALR is a South African crypto exchange that saw over $7.5 billion in trading volume since 2019 with more than 250 thousand retail customers and 500 institutional. The company raised $50 million in a Series B that brought up its valuation to $240 million. The funding was led by Pantera Capital, with participation from Alameda Research and Coinbase Ventures, among others. This was the largest funding round for an African crypto exchange and will help VALR expand its operations into other African markets and India. (South African exchange raises $50M in Africa’s largest funding round)
ArDrive is an Arweave-based storage application that was used by activists in Hong Kong to avoid censorship by the Chinese government last year. The startup raised $17.2 million in a seed round led by Blockchain Capital, seeing participation from the Arweave Team, Sino Global Capital, and many others. The app allows users to store files like photos, texts, and even a pro-democracy newspaper coming out of Hong Kong. ArDrive selects random pieces of files stored anonymously on their blockchain and verifies only that piece as a fast and cheap means for verifying the whole file in order to store anonymous, permanently accessible files. (Blockchain Storage App ArDrive Raised $17.2 Million)
KnownOrigin is a British NFT marketplace that connected 5,000 creators with over $30 million in sales in 2021 through an instantaneous royalties payment system for every sale made to collectors. The company raised $4.85 million in a Series A round led by GBV and Sanctor Capital, with participants including D1 Ventures, LD Capital, and Cultur3 Capital, among many others. KnownOrigin is also partnering with Netflix, Adidas, and Adobe in order to help build an ecosystem in the UK that will further stimulate interest, development, and adoption of NFTs. (UK-Based NFT Platform KnownOrigin Secures $4.85M Series A Investment)
Nested is a French DeFi platform where users mint their portfolios as NFTs in order to share their DeFi investment strategies with others. The startup raised $7.5 million in a Series A led by Alan Howard, the co-founder of Brevan Howard Asset Management. Participating investors included Republic Capital, Kinetic Capital, and CMT Digital. Nested will use the new funding for hiring and building out more features to the platform such as portfolio leaderboards, allowing users to upload staking strategies, and social media qualities like user profiles and messaging. (Alan Howard leads $7.5 million raise into DeFi trading platform Nested)
Thetanuts Finance is a crypto derivatives trading portal that offers structured products for users to easily access a variety of risk tolerances. The project raised an $18 million seed round led by Three Arrows Capital with participation from Deribit, QCP Capital, and Jump Crypto. The fresh capital will help Thetanuts build two new products on its roadmap: Theta-Index and Theta-Wheel. Theta-Index will allow users to invest in a derivatives basket to try to level out volatility risks from trading options on just one token. Theta-Wheel is a physically settled vault product that aims to help users buy low and sell high. (DeFi Platform Thetanuts Finance Raises $18M Seed Funding to Fuel Growth)
TRM Labs is an AML service provider that has partnered with major crypto firms including Circle, FTX US, Binance, and MoonPay. The company raised an undisclosed amount from JP Morgan. TRM is attempting to provide the infrastructure necessary for large institutions, like JPM, to safely handle digital assets without having to risk going outside future regulatory frameworks. Because of on-chain tracking tools developed by companies like TRM Labs, regulators were able to successfully decrease illicit flows into crypto tokens in 2021, even though the crypto market has more than doubled. (JP Morgan forays into blockchain tech with this new ‘strategic investment’)
Rarify is an NFT infrastructure platform that helps projects integrate project-native NFTs into their platforms through its API product. The company raised $10 million in a Series A that valued it at $100 million. The early-stage round was led by Pantera Capital, with Eniac Ventures, Greycroft, Hyper, and Slow Ventures participating as well. Other uses for its API infrastructure include maintaining real-time market data on NFTs across multiple blockchains and NFT marketplaces. The new funding will help with hiring and launching new products to integrate with enterprise partners. (Pantera Capital Leads $10M Investment in NFT Infrastructure Startup Rarify)
Diagonal is an Ethereum-based subscriptions payment platform for creators and developers to integrate subscription mechanisms into their applications, which is . The company raised a $2.5 million seed round led by Mechanism Capital with participation from MetaCartel Ventures, the LAO, Coinbase Ventures, and a few notable angel investors, among others. Diagonal plans to use the funds to launch beta tests on Ethereum Layer 2 protocols like Polygon, Arbitrum, and Optimism, with the creation of a decentralized autonomous organization (DAO) on the roadmap in order to decentralize governance of the project. (Diagonal Raises $2.5M for Web 3 Subscription Payments)
Praxis is a project to build a real-life crypto city-state governed by shared values in place of the current labor market principles. The startup closed a $15 million Series A round led by Paradigm Capital, Alameda Research, and Three Arrows Capital, with Apollo Projects and Robot Ventures participating as well. The team is currently working with governments around the Mediterranean to secure an area that can be developed into a new city, with initial investments that will be focused on environmental technology and functional architecture. (City-building startup Praxis secures $15M in Series A Funding)
metaENGINE is a gaming infrastructure platform that will provide tools for game developers to build and launch massive multiplayer online (MMO) projects and mint NFTs for their games. The startup raised $4 million in a seed round led by Lemniscap and Jump Crypto with participation from Polygon Studios, Blockwalll, and Insignius Capital, among many others. metaENGINE already has 25 gaming projects ready to join on the engine’s launch on the Polygon Network, ready to take advantage of metaENGINE’s unique multi-game functionality features, where players’ items in one game can be integrated into other games in order to open up more interoperability in the metaverse (GameFi platform metaENGINE raises $4M in seed funding ahead of its v1 release)
Lido Finance is an Ethereum-based staking platform that helps institutional investors stake holdings on Ethereum when the chain completes the transition to a Proof-of-Stake (PoS) consensus system. The company raised $70 million in a strategic investment from a16z. Because an Ethereum validator needs to have at least 32 ETH staked, Lido also helps with decentralizing Ethereum 2.0’s network by being able to connect potential validators with enough stake to get started. The company also clears up the complexity and handles the backend of institutional investor’s efforts to earn staking rewards off of their ETH holdings. (Andreessen Horowitz invests $70M in Ethereum staking protocol Lido)
Token Sales
FriesDAO ($FRIES) is a Decentralized Autonomous Organization (DAO) that pools its members’ contributions to purchase fast food restaurants using a democratic governance structure. The DAO raised $5.4 million in a token sale that will be used to purchase a Subway franchise branch, assuming the FRIES token holders vote in favor of the acquisition. FriesDAO is one of the more public examples of the evolving nature of DAOs, which originally started as a way for a community to afford large purchases, most famously one of the original copies of the US Constitution at a Sotheby’s auction last year. Now we are seeing the DAO system used to operate potentially large-scale enterprises that are entirely owned and operated by the community instead of a small board of directors. (FriesDAO raises $5.4 million with plan to buy fast food restaurants)
Crypto Capital Markets
Zignaly ($ZIG) is a crypto investment platform that links users with trading experts and actively managed funds to help retail investors learn and employ more advanced trading strategies to maximize gains. The company has secured a $50 million financing agreement from GEM Global Yield. The platform has attracted over $120 million that is being managed by more than 300 traders and fund managers. At the moment, Zignaly supports investment strategies on Ethereum, Polygon, Solana, Avalanche, and Binance ecosystems. (Crypto Investment Platform Zignaly Secures Up to $50M in Financing Deal)
New Venture Capital Funds, Ecosystem Funds, and Alliances
The South Korean government is creating a $187 million national metaverse project with the hope that it will stimulate growth in business and crypto industry activity. The country’s Ministry of ICT, Science, and Future Planning is tasked with building a metaverse ecosystem, the Expanded Virtual World, and will use the funds to develop the infrastructure and attract content creators and corporations. At the moment, NFT gaming and token issuance are prohibited in South Korea, but this fund comes along with new policies that should foster growth of digital technology in the country. (South Korea announces $187 million investment in a national Metaverse project)
Electric Capital is a crypto venture capital firm that places long-term investments to take full advantage of the budding, high-growth crypto industry. The firm raised $1 billion that will be split into a $400 million venture fund and a $600 million token fund. The funds are not focused into any specific verticals and will be used to invest in Layer 1s, infrastructure, DeFi, NFT, and DAO projects. Though the fund will be deployed in practically all crypto verticals, the projects that Electric Capital are targeting will be ones with fair launch token allocation and strong community-first governance and roadmaps. (Electric Capital Raises $1B for 2 New Crypto VC Funds)
Dialect is a Solana-based smart messaging project to create a push notification system triggered by on-chain events. The other use case that the startup is developing is a wallet-to-wallet messaging infrastructure for Web3 apps. The protocol raised a $4.1 million seed round led by Multicoin Capital and Jump Crypto.
Why is this a Big Deal
Push notifications have been one of the most user-friendly components of Web2 applications that have been consistently becoming more and more customizable in order to help people stay on top of the most important developments in their lives. Until recently, push notifications based on on-chain events haven’t been much of a priority for developers, even though Web3 provides an opportunity for the hyper-personalized interfaces for users due to the open source and democratized data nature of Web3. Dialect provides the infrastructure for people to receive real-time notifications with actionable optionality embedded into those notifications, vastly increasing the usability of a global ecosystem that runs 24/7. At the moment, one of the biggest hurdles for adoption of Web3 applications is complicated user experience that turns off potential users, and Dialect is trying to position itself to gain a first mover advantage in providing a solution to this problem. (Dialect Raises $4.1M to Bring ‘Smart Messaging’ to Solana)